Mondelēz started legal action against Poundland earlier this year.
It alleged the UK discount retailer’s triangular-shaped chocolate Twin Peaks, set to launch in July 2017, infringed its prism shape trademark for Toblerone.
The deal
However, the parties reached a settlement.
Under the agreement, Poundland may sell 500,000 bars of Twin peaks currently in production for December 2017, provided the package is distinct from Toblerone’s gold packaging.
The retailer can also relaunch a redesigned product in 2018 that does not infringe Toblerone’s shape trademark.
‘A good deal for Poundland’
Dr. Chris Hayes, a partner Lewis Silkin LLP, told ConfectioneryNews: “This looks like quite a good deal for Poundland, which is allowed to sell up to 500,000 bars already in production over the 2017 Christmas period and can redesign the bar and packaging to avoid any confusion with Toblerone in 2018.”
The lawyer said Mondelēz can still act to stop Toblerone copycats, but more importantly, the deal preserves the relationship with an important commercial partner.
“The underlying motivation behind this deal is an acknowledgement by Mondelēz of the commercial importance that Poundland’s stores play in retail confectionery, not just for Toblerone but for other Mondelēz products,” he said.
According to Hayes, Mondelēz was in a “relatively strong legal position”, however Toblerone was a significant seller in Poundland.
Poundland a key account for Toblerone
Poundland sold around 11m bars of Toblerone in 2016.
But Hayes said sales dropped when, in response to higher ingredients, reduced Toblerone’s size from 170 g to 150 g by placing larger spaces between triangles.
“The Twin Peaks bar was intended to appeal to consumers who were angry at the reduction in the number of peaks in the Toblerone bar, as the Twin Peaks bar contained 30 g more chocolate than Toblerone,” said the lawyer.
Poundland’s Twin Peaks weighs 180 g making it larger than Toblerone even before the redesign.
British bargain hunters
Sales at bargain stores like Poundland grew 17% for the year up to July 2016 to £4.9bn ($6.5bn), according to market researcher Nielsen.
Britons visit bargain stores more frequently than German discount chains Aldi and Lidl, a phenomenon also putting pressure on mainstream supermarkets Tesco and Sainsbury’s, it says.
Nielsen surveys suggest 78% of British consumers shop at bargain stores, more than half of whom do so at Poundland.