In the Rs 26,000-crore organised biscuit market, the digestives segment is estimated at around Rs 500 crore
In a major relief to ITC, the Delhi High Court on Tuesday restrained Britannia Industries from selling its digestive biscuits NutriChoice Zero and also asked the Wadia Group company to phase out its existing stocks within a month.
Justice S Muralidhar in its interim order said: “Britannia is granted four weeks to phase out existing stocks and maintain accounts.”
The cigarette-to-FMCG major, ITC, had moved the HC seeking to restrain Britannia Industries (BIL) from “copying biscuit packaging.” It had alleged copying of ‘trade dress and colour combination of its Sunfeast Farmlite Digestive ALL GOOD’ biscuit packages by Britannia’s Nutrichoice Digestive Zero biscuit packages. Both are currently sold in a blue and yellow packaging.
ITC in its petition sought damages for infringement of trademark and goodwill, and to withdraw the Britannia product in the current packaging.
Britannia had responded by saying that it was the market leader with a 66% share in digestive biscuits. It has filed a counter-suit against ITC for use of yellow colour on digestive biscuits. The case is also being heard by the court.
While Britannia had initially agreed to change the blue colour of its packaging, it refused to change the yellow colour of the packaging.
It told the court that yellow was the dominant colour that it had been using for packaging variants of its digestive biscuits and could not consider changing that.
The packaging of ITC’s Sunfeast Farmlite digestive biscuit was launched in February 2016, while Britannia launched in the market its NutriChoice digestive biscuit in July 2016. According to ITC, Britannia’s impugned packaging for its digestive zero biscuit was an imitation of the Kolkata-based conglomerate’s packaging for Sunfeast farmlite digestive biscuit and when placed next to each other, they were indistinguishable to the unwary customer.
In the Rs 26,000 crore organised biscuit market, the digestives segment is estimated at around Rs 500 crore. While British firm United Biscuits’ McVities dominates the category, Britannia is among the leading players.
ITC’ shares surged in the morning after the Delhi High Court ruled in favour of the company in the packaging dispute. However, its scrip on Tuesday closed at Rs 262.35, down 0.04% on Bombay Stock Exchange from the previous close. Britannia Industries’ scrip closed at Rs 3457.65, up 2.96% on the Bombay Stock Exchange.