Australian dairy group Bega Cheese has triumphed in its long-running legal battle with US food giant Kraft over the packaging on its peanut butter product.

In a dispute dating back some 18 months, Kraft took legal action against Bega, claiming that the jar’s yellow lid and label was too similar in design to its own product to which it claimed it held exclusive rights and amounted to misleading and deceptive conduct.

But the Federal Court in Australia has today (1 May) ruled against Kraft, saying Bega had acquired the rights to use the labelling from Mondelez Australia in 2017.

The court will determine further orders and damages in a hearing at a later date.

The dispute’s origin dates back to Kraft being bought by Heinz and its Australian products, including peanut butter, moving across to fellow food heavyweight Mondelez International.

Mondelez Australia sold its peanut butter business and other assets, including the Vegemite brand, to Bega Cheese in 2017.

Kraft claimed Mondelez could not sell the rights to use Kraft’s peanut butter packaging as the company merely had a licence to use it which expired in December 2017.

But this has been rejected by Justice David O’Callaghan, who found Bega Cheese acquired all rights to use the yellow-labelled and lidded peanut butter jar when it bought the assets from Mondelez Australia.

In a statement to the Australian Securities Exchange (ASX) following the ruling, Bega Cheese said: “Importantly, this gives Bega Cheese the right to continue to use the current packaging of its Smooth and Crunchy Peanut Butter products.

“We look forward to continuing to produce and supply our customers with our much-loved peanut butter products.”

According to the Australian media outlet ABC, Kraft said it was disappointed by the judgement and is considering its options.