Oatly, the Swedish plant-based company, has been barred by the UK Court of Appeal from using the term ‘milk’ for its products.

This decision culminates a prolonged legal battle between Oatly and Dairy UK, the trade association representing the British dairy industry. The court decided that only animal-based products can be labeled as “milk,” a position Dairy UK supports to avoid confusing consumers and to protect traditional dairy terminology.

The court’s decision overturns a previous High Court ruling that had sided with Oatly, stating that their use of ‘milk’ in marketing was unlikely to mislead consumers, especially given the clear distinction Oatly makes about its products being dairy-free.

Oatly first attempted to secure the trademark “Post Milk Generation” in 2019, but the Intellectual Property Office (IPO) turned down the application in January of the following year.

The IPO labeled the use of “milk” as deceptive because Oatly’s products aren’t actual dairy milk. Dairy UK supported this view, arguing that it was illegal to label non-dairy items with “milk” since they aren’t derived from “animal secretions.”

Oatly then took the matter to the High Court, which in December reversed the IPO’s decision. The court disagreed with the IPO, asserting that consumers wouldn’t be misled by Oatly’s use of the term “milk.” However, that decision has now been overturned after the Court of Appeal found that the term should be reserved for dairy milk.

Dairy UK insisted that the court enforce EU regulations established in 2013, which, despite Brexit, still prohibit using the term “milk” for marketing and labeling non-dairy alternatives.

“Be under no illusion that making it harder to label and find dairy alternatives benefits the interests of Big Dairy and Big Dairy alone,” said Bryan Carroll, Oatly’s general manager in Britain and Ireland.

“Their cynical attempts to stifle competition through legal action contradicts the interests of the British consumer, creates an uneven playing field for plant-based products, and worst of all: it delays progress in shifting the public towards more sustainable diets,” he added.

Dr. Judith Bryans, chief executive of Dairy UK, stated, “This unanimous decision reinstates the Intellectual Property Office’s original decision, which declared the trademark invalid for oat-based products. This ruling clarifies the legal protection of dairy terms, according to which the term ‘milk’ is reserved for dairy milk, except in defined circumstances.”

Marisa Heath, CEO of the Plant-Based Food Alliance which includes Oatly, commented, “We don’t believe the judgement is in the best interests of consumers and that should be the key priority. The term ‘dairy designation’ clearly has too wide an interpretation and Oatly is not calling themselves milk – they are saying they are ‘post milk’.” Heath argues that the court’s decision doesn’t serve consumer interests and misinterprets Oatly’s branding.

This recent ruling is a significant setback for the UK’s plant-based milk industry. Although Oatly has the option to escalate the matter to the Supreme Court, the decision from the Court of Appeal stands as authoritative. This verdict essentially prohibits vegan brands from using dairy-related terminology in their marketing.

This isn’t the first time the dairy or meat industry has contested the labeling of plant-based products.

The Food Standards Information Focus Group, comprised of trading standards officers from the UK, has been advocating for regulations that would prevent non-dairy products from using descriptors such as ‘not milk’, ‘cheeze’, ‘mylk’, ‘yoghurt-style’, and terms like ‘semi’ or ‘whole’ to describe their contents.

In the USA, some state legislation has been proposed or passed that restricts the use of meat-related terms like “burger” and “sausage” for plant-based products, arguing that such labels could confuse consumers.

The French government attempted to ban plant-based brands from using meat terms like ‘steak’ and ‘sausage’ on labels. However, the European Court of Justice blocked this attempt, allowing plant-based products to continue using these terms.

While Oatly hasn’t dismissed the possibility of appealing to the Supreme Court, the existing verdict has established a benchmark for the UK’s plant-based dairy sector. This raises concerns about how brands can effectively communicate their products’ nature without breaching trademark regulations.

Marisa Heath concluded: “I think this is a waste of time and we should be focusing on producing better and more sustainable food to tackle issues facing us globally around climate change and health.”