Store wars: big brands battle supermarket own-brands

Step into any supermarket and you are immediately confronted with a colourful cacophony of products all clamouring for consumption as companies compete to gain market share. Attractive, recognisable packaging and intelligent pricing all play a part in the battle for your weekly shopping budget, especially when big brands find themselves in competition with supermarket discount ranges.

When own-brand ranges first appeared on supermarket shelves, they were distinguished by the simplicity of their packaging. They were marketed as “budget” alternatives to big brands, and consumers tacitly accepted that these products would be lower quality than household name products but were willing to substitute them to save money.

More recently, however, the packaging on supermarket own-brand products has started to resemble that of their big brand equivalents. In some notable cases, this has shifted the battle from the shop floor to the court room, as category-leading brands accuse supermarkets of copying products, packaging design, and trade marks.

The brands have a point. They invest heavily in designing, developing, and marketing products under their trade mark, seeking to build a connection with customers and a reputation for quality. From their perspective, an own-brand product that looks suspiciously similar to their branded item is a cynical attempt to confuse customers and piggyback off their hard-won brand capital. However, as we’ll see, bringing copycat vendors to book is not as straightforward as it might seem.

A tale of two caterpillars

The most high-profile conflict in recent years centres on caterpillar-shaped celebration cakes. British icon Marks & Spencer (M&S) launched its “Colin the Caterpillar” cake in 1990 and it has been enduringly popular. In 2021, however, M&S filed a lawsuit against German discount grocer ALDI, alleging that its Cuthbert the Caterpillar cake infringed registered M&S trade marks, creating the likelihood of customer confusion and associating M&S with a lower quality product.

What happened next was a masterclass in manipulating the court of public opinion—we covered it in our blog at the time. ALDI’s social media team successfully positioned Cuthbert as the plucky underdog battling the evils of corporate law (despite ALDI dwarfing M&S in commercial size), and with a range of stunts and tongue-in-cheek social posts, managed to turn accusations of IP theft into a wave of public support. 

In the end, the two companies reached an out of court settlement, the details of which have never emerged, but Cuthbert made a triumphant return to ALDI’s shelves – sporting a new bow tie – and ALDI continues to mercilessly mock M&S on social media whenever the opportunity arises.

Registered Designs come to M&S’ aid

Following the caterpillar case, M&S increased its filings for trade marks and registered designs relating to its product innovations and brand characters, including Percy Pig and caterpillar spin-off Connie.

This strategy paid dividends, when M&S brought another case of infringement against ALDI, this time relating to a light-up “snow globe”-style gin bottle with gold flakes within the liqueur.

M&S introduced the bottle for the Christmas 2020 peak season when it gained enormous popularity. When ALDI launched a very similar-looking light-up bottle in November 2021, M&S was ready to act, armed with the Registered Design protection it had secured in July 2021.

In January 2023, the Intellectual Property Enterprise Court decreed that ALDI’s product did not create a sufficiently different overall impression to the M&S product, and therefore infringed its design. ALDI appealed, but in February 2024 the Court of Appeal upheld the decision.

“Benchmarking” strategy may allow wriggle room

It is natural to wonder how supermarkets that appear to be copying big brands’ designs and packaging can “get away with it”. A recent case, again featuring ALDI, gives some insight into this.

ALDI’s cloudy lemon cider product – launched under its Taurus brand in May 2022 – faced accusations of copycatting from Thatchers, which introduced its own cloudy lemon cider in 2020. Thatchers claimed that the overall appearance of the ALDI products infringed their own registered trade mark, being highly similar. Thatchers also claimed ALDI was “passing off” its products as theirs and gaining an unfair advantage from Thatchers’ reputation.

ALDI denied infringement, but accepted that it had used Thatchers’ product as a “benchmark” for developing its own product. ALDI’s evidence stated that it has sold other third-party cloudy lemon cider brands and identified a market niche for an own-brand product, which it benchmarked against Thatchers.  

In deciding in ALDI’s favour the court held that its products did not meet two key requirements for infringement. The judge ruled that the signs used in ALDI’s packaging were similar, but only to a low degree, and that there was a lack of evidence that customers were confused between the two products. The claims of passing off and unfair advantage were also dismissed. Interestingly, the judge was requested to conduct a “taste test” during proceedings, which she did, finding that the two products tasted similar from a quality perspective. She therefore agreed with ALDI that the Thatchers’ product would not be cast into a negative light if consumers drank the ALDI product believing it to be Thatchers.

Ironically, ALDI’s reputation for copying brands also came up in court, with a comment drawn from social media saying that the ALDI product was a “knock-off” of Thatchers’ product referenced in the Judge’s decision as an example that “makes it clear there is no confusion”.

Chartered Trade Mark Attorney Eleni Mezulanik of Keltie LLP has written a comprehensive analysis of this case for CITMA, which is well worth reading.

Taste the Difference?

Trade mark and Registered Design infringement cases centre on the appearance of design of the product, but what about how it tastes? Big brands argue that their products are higher quality and that consumers who are confused into picking up an own-brand alternative without realising might believe quality had fallen.

Recently, the UK’s Channel 5 broadcast a programme that put this concern to the test, exploring whether consumers could taste the difference between so-called “luxury” food brands and supermarket equivalents. In a victory for the luxury brands, the tasters preferred the luxury brand in most cases. However, this does mean that big brands’ concerns are valid – a consumer that hasn’t realised they’ve picked up a brand mimic rather than their trusted choice is likely to be able to taste the difference.

We certainly haven’t seen the last of big brand versus own brand court battles and future cases may provide more clarity on just how close is too close for lookalike products. Certainly big brands are well-advised to make trade mark and Registered Design filings a central part of their commercial strategy.