Bega Wins Court Battle With U.S. Giant Kraft To Sell Its Peanut Butter

Australian brand Bega can continue selling its iconic yellow tub of peanut butter thanks to a victory in the Federal Court. 

The court ruled on Wednesday the dairy and food group had exclusive rights to use the yellow lid and red and blue labelling, bringing an end to a years-long court battle with American food giant Kraft.

The fight was sparked by a series of takeovers that saw Kraft bought by international giant Heinz and the Australian products, including peanut butter, moved under the Mondelez umbrella, which was later bought by Bega.

Kraft commenced proceedings claiming ownership of legal rights of the 'peanut butter trade dress' -- a term used in the U.S. trademark law to refer to the appearance of product packaging, in this case "a jar with a yellow lid and a yellow label with a blue or red peanut device, with the jar having a brown appearance when filled".

Image: Bega Peanut Butter Facebook

Kraft argued it is entitled to use the trade dress in conjunction with Kraft branded peanut butter that Heinz has manufactured and sold in Australia since about April 2018.

Kraft also alleged Bega had engaged in misleading or deceptive conduct over the marketing of its peanut butter.

After the sale of Mondelez to Bega, the Australian brand ran ads claiming "Kraft peanut butter is now Bega peanut butter" and that it was "never oily, never dry, with the same taste you've always loved, and is not Aussie owned by Bega".

Judge o'Callaghan rejected Kraft's arguments in a 178-page judgement on Wednesday, determining Kraft Heinz's use of the trade dress to be "false or misleading" under Australian law.

O'Callaghan found Bega had breached consumer law with respect to its first advertisement, but Kraft also breached the law in October 2017 with a press release describing the product as "loved since 1935".

The ruling means Bega is now "exclusively entitled" to sell its own branded peanut butter using the yellow lid, and red and blue peanut label.

"Bega Cheese is a proud Australian company investing in Australian jobs, Australian manufacturing and Australian farmers," Bega's chairman Barry Irvan said in a statement to the Australian Stock Exchange following the verdict.

"We look forward to continuing to produce and supply our customers with our much-loved peanut butter products."

The company with review the judgement before making any further announcements.

With AAP.