UK court dumps on Oatly’s ‘Post Milk Generation’ slogan

Oatly, the Swedish oat milk company known for its aggressive marketing and penchant for legal drama, has landed itself in another sticky situation. After years of back-and-forth battles, the UK Court of Appeal ruled against Oatly’s use of its trademarked slogan “Post Milk Generation” on food and beverage products, overturning a High Court decision from late last year that had initially favored the company.

The saga began in 2019, when Oatly registered the slogan for its oat beverages, crème fraiche alternatives, and yogurts, as well as T-shirts. Dairy UK, the trade association representing British dairy producers, immediately challenged the trademark. They argued that using the word “milk” in this context violated the strict 2013 European Court regulations, which prohibit non-dairy products from using dairy-related terms.

The origins of this latest court case means that it dates back to the leadership of then-CEO Toni Petersson, who was the architect of Oatly’s financial deterioration after going public in May 2021. The company had a price of 28.73 soon after the IPO and quickly fell from there, spending most of the past 2.5 years under a price of 5.00 and today sits at around 0.71. That 2021 year also saw Oatly suffer wide criticism for a juvenile and off-putting Super Bowl commercial, while it also got in trouble with the U.K.’s Advertising Standards Authority for making phony environmental claims about competitors in the dairy and meat spaces.

Petersson left as CEO in May 2023 after taking a role on Oatly’s board.

Judith Bryans, CEO of Dairy UK, applauded the this new Court of Appeal’s ruling, saying, “This unanimous decision reinstates the Intellectual Property Office’s original ruling, which declared the trademark invalid for oat-based products. The ruling ensures the legal protection of dairy terms, which is vital for transparency and consumer trust.”

Oatly briefly celebrated a victory last December when the High Court ruled in its favor, reasoning that the slogan didn’t directly describe the product and was unlikely to confuse consumers. In reversing that decision, the Court of Appeal cited the necessity of adhering to UK and EU regulations.

The judge, in a detailed ruling, described the act of non-dairy companies using dairy terms as a “drastic” and unjustified departure from legal precedent.

Bryan Carroll, Oatly’s UK and Ireland general manager, expressed disappointment to various food publications. “This ruling overturns the common sense we saw from the High Court earlier this year,” he said. “Be under no illusion that making it harder to label and find dairy alternatives benefits the interests of Big Dairy and Big Dairy alone.”

Carroll hinted at a possible appeal to the Supreme Court but stopped short of confirming any plans.

The Court of Appeal’s decision underscores the legal argument that terms like “milk” are strictly reserved for animal-derived products, despite plant-based companies’ claims that consumers are not confused. Dairy UK, naturally, sees the ruling as a victory for clarity. “This ruling clarifies the legal protection of dairy terms, according to which the term ‘milk’ is reserved for dairy milk, except in defined circumstances,” Bryans added.

Plant-based advocates are less than thrilled. Jasmijn de Boo, CEO of ProVeg International, criticized the decision, pointing to outdated EU regulations that continue to be enforced post-Brexit.

“Several studies show that consumers are not being misled by the use of the term ‘milk’ for plant-based milks,” de Boo said, claiming environmental benefits to dairy alternatives.

Oat milk holds a roughly 24 percent share of the retail plant-based milk market as of 2023, though Oatly’s piece of that pie has dwindled significantly in recent years.