The peanut butter packaging, left, used by Mondelez at the time of its sale to Bega Cheese (red for crunchy, blue for smooth) … and the Bega Cheese packaging after it bought Mondelez in 2017

November 18, 2020

The long-running saga about peanut butter labels may finally be over after the High Court dismissed an application by Kraft Heinz for special leave to appeal.

Bega Cheese executive chairman Barry Irvin said the decision, handed down on November 13, confirmed Bega Cheese’s right to use the current packaging of its smooth and crunchy peanut butter.

The dismissal means a decision by the Full Court of the Federal Court, handed down in April in favour of Bega, will stand.

The High Court bid was the latest round of a long-running and costly legal battle waged between the Kraft and Bega.

The issue centred on a dispute about who owns peanut butter’s “trade dress” – ie the distinctive yellow lid, yellow label and other features of the peanut butter jars.

The dispute began in January 2017 when Bega Cheese purchased Kraft Heinz subsidiary Mondelez Australia (formerly called Kraft Foods Limited) and obtained the peanut butter business, assets and goodwill of Mondelez under the deal.

Mondelez-produced peanut butter had been marketed under the Kraft name through a licensing agreement between Kraft and Mondelez.

Later the same year, Bega bought out the Peanut Company of Australia to secure its peanut supply.

When the licence to use the Kraft name expired, Bega began selling the Australian-made products under its own name.

However, Kraft re-entered the Australian market in 2018 selling peanut butter in yellow-lidded jars and launched proceedings in the Federal Court claiming ownership of the trade dress.

Both companies counter-sued one another for misleading and deceptive conduct under competition and consumer law.

Kraft claimed the distinctive peanut butter trade dress was never Mondelez’s to sell.

But in a ruling last year, Federal Court Justice David O’Callaghan said Bega had acquired “all rights” to the trade dress when it bought Mondelez.

And in April, the Full Court of the Federal Court upheld the trial judgment that confirmed Bega’s right to use the trade dress on its peanut butter products.

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