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EDITOR'S OPINION: DEAR DAIRY....

It’s all Greek to me… How fair was the High Court ruling against Chobani?

By Mark Astley+

09-Apr-2013
Last updated on 09-Apr-2013 at 15:24 GMT

It’s all Greek to me! How fair was the ruling against Chobani?

New York-based Chobani was handed an injunction last month prohibiting its use of the term ‘Greek yogurt’ in the UK following a court battle with rival, Fage, which claims that the term refers to geographical origin. But can Athens-based Fage stand by the claim considering its US manufacturing presence?

Last month, the UK High Court issued Chobani with an injunction to permanently restrain its use of the term ‘Greek yogurt’ in the UK to market its…. well, Greek yogurt products.

The case centred on Fage UK’s claim that only yogurt made in Greece should be labelled as ‘Greek yogurt’, while Chobani argued that ‘Greek yogurt’ is defined by a specific manufacturing process, “not reference to its place of origin.”

Mr Justice Briggs, who presided over the seven-day trial, concluded that a substantial proportion of British consumers who buy Greek yogurt believe that it is made in Greece.

In my opinion, the High Court’s reasoning was fair. As was Fage’s argument – its Total Greek yogurt range sold in the UK is actually made by Greek people (probably) in a production plant on the outskirts of Athens (Greece, not Georgia).

On that principle, however, you could argue that the Total Greek yogurt range sold in the US is about as Greek as Ronald McDonald. The Greek yogurt distributed by Fage USA is manufactured at a site in Johnstown, New York.

With this in mind, some consider Fage’s pursuit of the UK injunction a tad hypocritical.

“Fage pulled a fast one and got away with it…,” said one comment posted under DairyReporter.com’s coverage of the High Court decision.

Another sarcastically queried whether Fage USA would close its New York-based operations to adhere to Fage UK’s authenticity claims.

“Seems that if Fage’s position that to be considered Greek product [it] must originate from Greece then logically they will be closing their plant in New York. I think the real reason is that Chobani has swept the market out from under them and they are doing anything they can to remain relevant,” said the commentator.

Fage USA's Johnstown, New York manufacturing plant produces Greek yogurt for US consumers.

DairyReporter.com put these suggestions to Fage USA last week, but no reply has been received to-date.

Fage UK, which brought the case against Chobani, declined to comment on what it described as an ongoing legal matter (DairyReporter.com understands that Chobani is appealing the High Court decision).

While the injunction reeks of double-standards, I can understand one possible motive for Fage’s legal move – competition.

Fage USA is one of the worst-hit victims of Chobani’s success.

The company’s share of the US Greek yogurt market fell from 94% in mid-2007 to 14% by mid-2012, according to New York-based research firm, Sanford C. Bernstein. Meanwhile, Chobani’s share was estimated at 47% in mid-2012, despite only making its debut in the US in 2007.

In addition to that, the country that Fage calls home (Greece as you’ve probably established by now) isn’t in the best state economically.

Fage Total Greek yogurt first hit UK supermarket shelves for the first time in the early 1980s….Chobani arrived just last year.  I think it goes without saying that Chobani represents a significant threat to Fage in the UK and on a global scale.

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