UK: Nestlé: no breaks (COMMENT)
Although Nestlé leads in many areas of the food and drink industry, it can't win all of its battles. This week, the company lost its UK court action to trademark its "Have a Break" slogan. It would be unwise to expect Nestlé to simply sit back and accept defeat - either in the courts, or in the marketplace.
Britain's High Court has turned down an appeal from food and drinks giant Nestlé, denying the company's bid to trademark the phase "Have a Break". The judge ruled that the phrase had not "acquired a distinctiveness as a result of its use [by Nestlé] as a mark". Nestlé now says it will take the case to the Court of Appeal, or even the European Court.
The case began earlier this year when Nestlé tried to trademark the phrase, but was stopped after objections from rival confectioner Mars. The registry stated that the phrase was "devoid of any distinctive character" and so "lacked distinctiveness".
The confectionery market is one of the most highly competitive in the UK food industry. Three powerhouse players account for more than 85% of the market - Cadbury's, Mars and Nestlé - ensuring that competition is always fierce. Nestlé uses the "Have a Break, Have a Kit Kat" phrase in the UK and internationally to promote Kit Kat, the company's best selling chocolate product.
Inevitably, Nestlé will be disappointed with the court's ruling. The danger lies with the possibility that since many consumers are not aware of which company is behind which food product, Nestlé's competitors may now try to piggyback on its brand values by using the slogan in their own advertising.
Nestlé is set to appeal the decision but however the appeals pan out, the situation is likely to incite Nestlé to be even more aggressive in the confectionery market. The company already introduced its Double Cream product earlier in the year and has plans to introduce a new countline based on the Smarties brand as a further assault on the UK confectionery market. The company will not take this sitting down.
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