Court ruling favours Australia’s Bega Cheese in dairy giant Fonterra’s trademark dispute

Audio By Carbonatix

Enlarge

(Reuters) – Australia’s Bega Cheese said on Monday that the Supreme Court of New South Wales has dismissed a case filed by Fonterra over trademark licensing agreements and the New Zealand dairy firm’s divestment plan.

Last November, Fonterra’s Australian units initiated proceedings against Bega Cheese, seeking a ruling that Fonterra’s divestment proposal would not impact the existing trademark license agreements with the Australian cheese producer, with room for changing certain control clauses within them.

Bega Cheese and Fonterra are linked through trademark license agreements, allowing Fonterra to use Bega’s trademarks on specific dairy products like cheese and butter.

In February, Fonterra said it will engage with potential buyers for its global consumer business and integrated businesses, which could include a sale and initial public offering.

The ruling may potentially delay Fonterra’s proposed divestiture, including the sale of its Oceania unit, as it could complicate the potential changes to the licence deal between the two firms.”We hope to work constructively with Fonterra Group on the sale of its Oceania businesses of which Bega Group is a natural acquirer and remains very interested in,” Barry Irvin, executive chairman of Bega Group, said.

Shares of Bega Cheese gained as much as 1.9%, the highest in a month.

(Reporting by Kumar Tanishk in Bengaluru; Editing by Sonia Cheema)