Fonterra and Bega Cheese have started legal proceedings in the Victorian Supreme Court this week over a brand licensing dispute. It is scheduled to run for five weeks, with another two weeks in February.
In 2001, Fonterra struck a deal to become the licensee of Bega Cheese until 2026.
In November 2015, Fonterra sold its nine per cent shareholding in Bega Cheese to free up capital for more strategic investments. It had bought the shareholding at the time of the bidding war for Warrnambool Cheese and Butter between Bega, Murray Goulburn and Saputo in 2013 (Food & Drink Business 04/11/2015).
Then, in 2017, Bega bought a suite of Kraft products from Mondelēz International. Bega Cheese then started rebranding products like peanut butter, Vegemite, cheese and cream cheese as Bega.
A spokesperson for Fonterra told Food & Drink Business the legal dispute is over the use of the Bega brand on peanut butter and other products.
“Fonterra has a long-standing agreement with Bega Cheese Ltd that gives us an exclusive licence of the Bega brand,” they said.
“Since the current agreement was negotiated back in 2001, we’ve nurtured and built the Bega brand, and supported the Bega company to grow and provide good returns back to its farmers, shareholders and community.”
A statement from Bega CEO Paul Van Heerwaarden said: “Given our arrangement with Fonterra has been in place for nearly 20 years now, we had hoped that a satisfactory commercial outcome could have been achieved without needing to trouble the courts with this matter.”
Van Heerwaarden told Food & Drink Business the company had reached out “several times” but had “failed to gain any meaningful engagement from Fonterra”.
“Despite attempts to resolve this matter the time has now come for Bega to stand up for what we believe is necessary to protect our material interests in and grow our famous Bega brand.”
Fonterra said it looked forward to the dispute being resolved.
