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American food giant Kraft Heinz to pay Aussie company Bega Cheese $9million over peanut butter fight

American food giant Kraft Heinz will pay Aussie dairy company Bega $9.25million after a three-year legal stoush over peanut butter

  • Kraft Heinz sold its Australian peanut butter business to Bega Cheese in 2017
  • Kraft peanut butter stayed on sale in Australia, with the same yellow lid and label
  • Bega won Federal Court case, and on appeal, now it won again in the High Court
  • Confidential settlement reached, with $9.25million to be paid to Bega 

A major Australian food producer has won in the High Court against an American manufacturer to settle a three-year legal stoush over peanut butter. 

Bega Cheese announced its case against American giant Kraft had been settled in the High Court with a confidential agreement.

It is understood to include a $9.25million payment to Bega.

Bega announced to the Australian Stock Exchange that it would discontinue legal action against Kraft after a settlement which included a $9.25million payment to it from Kraft

Bega Cheese announced its case against American giant Kraft had been settled in the High Court with a confidential agreement. It is understood to include a $9.25million payment to Bega

The dispute was over Kraft’s packaging because it continued to sell its peanut butter with a yellow label and lid in Australia, despite selling its peanut butter business to Bega as part of a deal with $460million in 2017.

It was the same deal which saw Bega buy Vegemite.

Kraft argued that while it sold Bega the recipe, and the factory that produced it, it couldn’t have sold the packaging because the licence for the packaging expired in December 2017.

So the US giant continued to sell peanut butter in Australia in the same colour packaging that Bega believed it had bought the rights to.

Bega took Kraft to the federal court and won, then won again when Kraft appealed the decision in 2020.

In the federal court Justice David O’Callaghan said the Australian company was ‘entitled exclusively’ to use the yellow packaging. 

It is understood the peanut butter sales are worth approximately $60million, the ABC reported. 

Bega told the Australian Stock Exchange, ‘all outstanding issues between the parties regarding the right to use the peanut butter trade dress and the legal proceedings have been resolved’ and that legal action would be ‘discontinued’.

Kraft Heinz took its case against Bega Cheese to the High Court after the Federal Court ruled Bega purchased the full trademark to the Kraft peanut butter line in 2012

Kraft Heinz took its case against Bega Cheese to the High Court after the Federal Court ruled Bega purchased the full trademark to the Kraft peanut butter line in 2012

‘We are a proud Australian company and are proud to own Australia’s favourite peanut butter.’

Whether Kraft will continue to sell peanut butter at all in Australia must now be in doubt.

As of Friday, peanut butter was not featured in Kraft’s online product range.

Daily Mail Australia approached Kraft Heinz for comment.

Read more at DailyMail.co.uk