Page 5 - Food & Drink Business Jan-Feb 2020

NEWS
FONTERRA, BEGA IN COURT OVER LICENSING DISPUTE
Fonterra and Bega Cheese started legal proceedings in the Victorian Supreme Court over a brand licensing dispute. An initial five week hearing will be followed with two more 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.
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 F&DB 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. ✷
China Mengniu to buy Lion Dairy & Drinks for $600m
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CHINA Mengniu Dairy Company is set to buy Lion Dairy & Drinks business for $600 million. The sale is subject to Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review
Board (FIRB) approvals and other standard closing conditions. It will signal the full divestment of Lion’s Dairy & Drinks business, following the finalised sale of its speciality cheese business to Saputo Dairy Australia for $280 million
in October. The sale
includes all white
milk, milk-based beverages, yoghurt, juice and water ice brands and assets. It also includes Lion Dairy & Drinks’ International business, and
Dairy & Drinks’ share of the joint ventures Vitasoy
Australia Products and Capitol Chilled Foods
Australia and Dairy & Drinks’ licensing
agreement for the Yoplait brand. CEO Stuart
Irvine said the sale of
speciality cheese to Saputo made the company assess all options for the balance of
the business. “We believe that Mengniu
Dairy, a specialty dairy player, is an ideal owner to take Dairy & Drinks forward, given its track record of investing in the Australian dairy industry, together with its global reach and deep capabilities. Bringing the businesses together will help drive Mengniu Dairy’s growth in the Australian domestic market, while also accelerating Dairy & Drinks’ aspirations in South East Asia and China. In addition, Dairy & Drinks will benefit from access to leading-edge dairy research and development capability and further investment as part of the Mengniu business,” he said.
In November, Federal Treasurer Josh Frydenberg and FIRB gave the go-ahead for Mengniu’s $1.5 billion takeover of Bellamy’s Organic with conditions. ✷
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