October 18th, 2012

So Sanitarium is heading off to the High Court to protect its rights in a product they are currently out of stock of? You have to wonder whether any of its public affairs team had a hand in that decision, or whether it is just another example of an excess of testosterone at management level. If so, there is a lot of it around in the brand world, where commercial property is too often used as an avatar for personal success, often at the cost of public capital in an increasingly competitive consumer market.

When well handled, such aggressive branding, as in the automotive case of Holden and Ford, becomes part of the brand appeal and drives both loyalty and profit for the company. There is an element of developing blind loyalty in the big consumer brand battles such as that between Pepsi and Coke, or, indeed, between Marmite and Vegemite. It is debatable whether taking a small importer up the Queen’s Council creek over a couple of thousand specially branded jars of royal breakfast spread is likely to attract much public sympathy for Sanitarium.

True, its product, in this case Marmite, will, should it ever return to local shelves, regain its market strength on the basis that there is nothing else quite like it. Yes, I am an avowed Marmite supporter, but surely that is at the very heart of this matter. Jars of English Marmite are hardly going to compromise the appeal of the New Zealand version to its loyal followers, no matter what the intellectual property lawyers may think.

Quite simply, the market problem with Marmite right now is that the manufacturer is unable to supply, so if consumers get a taste for something else during the hiatus period, that is hardly the fault of any operator but Sanitarium. Perhaps they should take God to court for causing earthquakes in Christchurch.

While there is an imperative on brand owners to protect their assets from corruption by fraudsters seeking to gain an advantage through brand burglary, there are other creativities than fraud, and sometimes the cleverness of these is more of an enhancement to the brand in question than it is a hinderance. Underground T-shirt manipulation of mainstream brands, for example, is invariably a means by which such conservative identifiers gain an element of cool, and consequently become more appealing to another sector of the market.

Who would have considered the potential in rap music to enrich the existing aristocratic marketplace for luxury booze until Courvoisier Cognac and Louis Roederer Cristal got their bad boy boost. While that did increase the rate of theft for both products in the US, it also energised their late night European and USA hospo markets as well as giving a timely boost to duty free.

While Louis Roederer was reportedly unhappy with the rap connection to its finest champagne, it did not charge in lawyered-up to claim its total control over the brand. That would have been laughable, and pointless, just as Sanitarium’s action is. What Roederer did do was make a public statement that salved the conservative sensitivities of its establishment customers, while it continued to smile secretly all the way to the bank.

Now if only Sanitarium had made a public Jubilee year concession to Ma’amite in its English livery, this might have been a public relations coup. Instead its a joke, one that could cost the Sanitarium brand more than QC fees.

The opinions of the writer are his own and do not necessarily reflect those of the publisher.


8 Responses

  • Trevor Walsh says:

    I would have thought that having the same brand on the shelf could be advantageous to Sanitarium. It is keeping the brand in front of the public and holding shelf space for the return of the real thing.
    I’n sure that when Sanitarium finally gets its act together, its Marmite will regain its dominant position and the pretenders will be relegated to the International Foods section of the supermarkets.

  • We’ve followed this case closely. It’s not so much that Sanitarium is heading to court, rather it’s being bulldozed there because the small retailer stubbornly refuses to reach a compromise. For weeks (and many, many hours) Sanitarium staff have bent over backwards to engage fairly and sympathetically with the small retailer on this issue. My understanding is that one scenario offered by Sanitarium was to allow the release of the infringing Marmite on the proviso that the profit be donated to a Christchurch charity. Most Kiwis would see this as fair and an elegant solution to the current problem of illegality. This would have allowed the small retailer to get his money back – some $12,000, be no worse off, while a local charity got the benefit and no food was wasted at the tip. Sanitarium is between a rock and a hard place with this case. Like any FMCG company it has to protect its brands. If it ignores blatant infringement instances and doesn’t defend its trademarks over time the ability to use those trademarks is diminished. The law could not be clearer on this point and we are already aware that one particular PAK’nSAVE is watching the outcome of this issue closely. FMCG magazine is an excellent magazine for the fast moving consumer goods industry so it more than all other periodicals should understand the importance of brands and their protection in the marketplace.

  • Keith Stewart says:

    RESPONSE

    Sanitarium are heading to court because they deem that to be their solution to the problem that they believe they have with their Marmite brand. Whether or not that problem reflects a real challenge to their ownership of the brand is a matter that the public will make a final judgement on, one which will be a more honest reflection of their brand management than any outcome in the court.

    My point is that a substantial component of a brand’s strength resides in public opinion, and that management of any brand must always consider this factor when seeking to take public action to enforce a certain level of proprietary control. On the balance of what is available public information, Sanitarium appear to be taking a considerable risk with this public perspective, especially given the response that my opinion piece has had from readers.

    As Katherine Rich points out, if a company does not …defend its trademarks over time the ability to use those trademarks is diminished. My point is that such defence needs to be both proprietorial protection, and public relations. In this case, it appears as if Sanitarium have been too protective of their proprietorial rights, at the expense of their public support. Not a textbook example of brand defence, at all.

  • In response to Katherine Rich’s comment: . . . “FMCG magazine is an excellent magazine for the fast moving consumer goods industry so it more than all other periodicals should understand the importance of brands and their protection in the marketplace.”
    ‘Keith’s Take’ is an opinion piece published in Foodnews, which is an e-newsletter with ‘FMCG focus’, sent out every Thursday. Keith is not currently a contributor to FMCG magazine, nor is this particular opinion piece likely to be published in FMCG magazine.

  • rob savage says:

    Sanitarium have bent over backwards to dominate as per usual.If i had signed their so called agreement it would have cut my tongue out as i had to say what they wanted me to say.It also called for personal guarantees on the future of Mamrite and other products we stock far heavier than Marmite.If the person who claims poor old Sanitarium are stuck between a rock and a hard place had taken the trouble to read the so called agreement maybe she wouldn’t be so pro Sanitarium.

    Also note the shipment left uk July 12.Stop notice put on August the 3rd.Must be wonderful to see into the future

  • Mediaweb, publisher of FMCG magazine and Foodnews enewsletter, welcomes robust debate about issues of importance to the food and beverage and FMCG sectors. We will not always agree with strong views expressed in our publications, but it’s important that commentators (and readers) have the right to express them – if they are fairly and reasonably held, can be backed by logical argument/substantiated facts and aren’t defamatory. Katherine Rich has been a thoughtful advocate for the grocery sector and we value her contribution to any debate. FMCG magazine and Foodnews fill very different roles: FMCG is a non-controversial information service to the sector, designed to provide product information in an industry-supportive way.Foodnews on the other hand, is deliberately controversial and designed to spark debate around issues of import to the sector.

  • rob savage says:

    here is the actual agreement:
    2 Infringing signs

    2.1 SIL, R J Savage and C S Savage agree that “Ma’amite”, “Marmite’s” and “Marmite”
    are Infringing Signs.

    3 Concealing the Infringing Signs

    3.1 SIL, R J Savage and C S Savage agree to attach concealing labels (the Concealing
    Labels) to both the front and back of each jar of the Goods in order that the
    Infringing Signs and any reference to the Infringing Signs are fully and completely
    concealed.

    3.2 SIL, R J Savage and C S Savage agree that:

    3.2.1 They will obtain prior written approval from NZHA to the form, content,
    manner of application and all other matters related to the Concealing Labels;

    3.2.2 The Concealing Labels shall not include any use of the Trade Mark or any
    similar Infringing Sign;

    3.2.3 The process used for the attachment of the Concealing Labels will be of a
    sufficient standard and the Concealing Labels will be of sufficient quality to
    ensure that the Infringing Signs are not able to be readily or inadvertently
    revealed or exposed in the future; and

    3.2.4 The costs associated, or arising out of the production and attachment of the
    Concealing Labels shall be borne by SIL, R J Savage and C S Savage.

    4 Release of Goods

    4.1 Once NZHA is satisfied that the Infringing Signs have been adequately concealed by
    the Concealing Labels NZHA will provide written notice to New Zealand Customs
    authorising the release of the Goods.

    5 Imports of future product

    5.1 SIL, R J Savage and C S Savage agree not to import or deal with any further products
    that infringe trade marks that are licensed to NZHA, including but not limited to
    products labelled “Ma’amite”, “Marmite’s”, “Marmite” and “Weetabix”.

    6 Confidentiality

    6.1 The Parties agree that the media statement in the form attached as Schedule A shall
    be used in the event of media enquiries. The Parties will not make any public
    statement in relation to this Deed, the Trade Mark, the Infringing Signs or any other
    matter related to or arising from this Deed other than the agreed media release.

    6.2 This Deed is confidential to the Parties, their legal advisors, ACA and licensees of the
    Trade Mark and must not be disclosed in any manner or to any persons or
    organisations except with the prior written agreement of the Parties, or for the
    purposes of enforcing this Deed, or as required by law.

    This is why we did not sign!

  • I think its interesting tonote that in 2011, Katherine Rich was demanding that the entire country of Denmark allow Sanitarium to import it’s Marmite into their country despite a new law that she claimed made the import and sale illegal. It was a bit more complicated than that of course, but the more complex issue wouldn’t have made such a good press release. She was insulting and condescending to a whole country. But woe betide anyone who complains about the behavior of a “New Zealand Company”

    Katherine Rich has a job to do, but even so, she has made several blatantly false statements about the case, and about Mr Savage. There has certainly been nothing thoughtful about her often personal attack on him, or in her lack of fact-gathering before making such attacks.

    And as for trying to make this about “charity” – and make use of an awful situation in Canterbury to further your POV as an advocate for the food industry – that is just appalling and shameful behavior.



Leave a Reply

*