Fonterra owns rights to distribute Bega Cheese/Dairy products. Bega buying the peanut butter and vegemite products has greyed the waters as they aren't dairy products. I doubt the general public would be privy to the details within the agreement and the exact wording around the product and product types and if the lawers can shuffle the words to include or reject the 2 non dairy products.
To me it's pretty clear cut, if the 2 non specific dairy products are classified as part of the original deal then Bega will lose and probably have to pay a hefty compensation to Fonterra for lost revenue. If they are rejected as part of the original claim Bega will be allowed to put the "Bega" logo back on the peanut butter (from memory they removed it). The counter claim at Fonterra will be hard to prove they deliberately scaled down marketing of Bega, to me it was more a shot over the bow at Fonterra which escalated.
I'm not sure which way I feel it will go. I would imagine the wording in the original deal would have been pretty specific to dairy related products but who knows. I wouldn't want to be holding Bega in 7 weeks if they lose....
BGA Price at posting:
$3.83 Sentiment: Hold Disclosure: Held
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