The 'green island’s gold' wins EU butter war

When Ulrike Peters goes shopping in her local supermarket in Berlin, she can easily spot her preferred Kerrygold brand in the butter section because "the package is golden and you see the cows on it," she says.

She hasn't really noticed any of the many imitation brands that have popped up over the years, but says if she saw another Irish butter product with the word "Kerry" on it, she might think it was from the same company. "It depends on how it looks," she says.

An EU General Court ruling this week means she will not be confronted with that possibility anytime soon. The long-running case saw the Kerry Group, an Irish-based rival of Kerrygold, seek to sell its Kerrymaid butter label outside of Ireland and the UK.

The court ruled in favor of Kerrygold, saying that while the Kerrygold and Kerrymaid butter brands "peacefully coexist" in fridges in Ireland and the UK, if the brands were side by side in non-English speaking EU countries it could lead to confusion among butter lovers.

Green island's gold

The intricacies of Irish butter products on German shelves might seem like small potatoes in the grand scheme of things but it's big business. Ireland is the largest butter exporter in the EU and the Kerrygold brand is the jewel. Owned by the company Ornua, it has enjoyed four decades of major success in Germany.

Its German advertisements call it "the green island's gold," trading on an old-fashioned image in Germany of Ireland as unspoilt and pastoral, full of green fields and happy cows.

Kerrygold Butter has consistently been ranked as the fastest-selling food and drink product on German retail shelves. Despite its image as a "premium" product, around 50% of Germans buy at least one Kerrygold product per year according to Ornua. Statista shows it is the most popular butter brand in Germany.

Its success there is one of the main reasons why Kerrygold has become Ireland's first €1 billion food brand. That success has invited pretenders to the throne though.

Kerrygold has created a positive image of Irish dairy products, leading to companies supplying discount stores such as Aldi and Lidl with own-brand Irish butter products such as "O'Grady's" or "Golden Hills." While they are careful not to infringe Kerrygold's copyright, their branding follows a similar playbook to what has worked for Kerrygold.

Imitation and flattery

But since July 2019, Kerrygold has faced a new competitor in Germany. Kerry Group, which lost this week's legal case against Kerrygold, launched its Dairygold butter brand in Europe's largest economy, hoping to scoop up a dollop of the market for Irish butter. Unlike the discount imitation brands, Dairygold — like Kerrygold — is a popular brand of butter in Ireland itself.

"When other companies try follow us in it is a compliment to the work we have done, but ultimately it's about consumers and they love what Kerrygold stands for," Ornua Chief Executive John Jordan said at the time.

Dairygold's attempt to shake up the German market is still at an early stage but intriguingly its early ad campaigns in Germany focused on its links to the county of Kerry in south-western Ireland, rather than the neighboring county of Cork where the brand's roots ultimately lie.

The reason for that can perhaps be explained in the court case it lost this week. The verdict largely centered on the place Kerry itself and the level of knowledge EU citizens in non-English speaking countries would have of it. The Kerry Group argued that it should be able to register its Kerrymaid trademark outside Ireland and the UK because Kerry was a well-known location around the world.

However, Ornua's lawyers successfully argued that allowing other butter and dairy brands to use the word Kerry in markets such as Germany would result in a "blurring" of its billion-euro brand.

Old gold versus new gold

It remains to be seen if the ruling will have any significant consequences for other EU food brands whose names are indelibly associated with specific geographic locations.

The case does mean that the EU court has now reaffirmed the earlier EUIPO decision that brand recognition is not automatically granted as uniform across the entire bloc, despite its status as the single market.

For Kerrygold, it's a significant victory for what is arguably Ireland's most successful corporate brand. Originally conceived by the former media magnate Anthony O'Reilly, who headed the Irish Dairy Board in the 1960s, the brand was seen as a way of allowing Irish dairy farmers to market their product globally under one lucrative mark.

In markets like Germany, the brand has long since moved beyond butter to include various dairy products such as cheese where it also holds significant market share.

The name of its parent company Ornua comes from the Irish language phrase Ór Nua, meaning "new gold." The court victory this week will likely ensure that Kerrygold retains its own lucrative shine in the markets it guards carefully.