Opinion: Is a stoush over Weet-Bix/Weetabix really worth the effort?

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For a company that produces mostly healthy food products, Sanitarium gets a pretty bad rap.

Sanitarium says the British version of the cereal infringes on its 90-year-old trademark.
Source: 1 NEWS

It's not hard to see why. It doesn't pay company income tax - because it's owned by the Seventh Day Adventist church and reports all its profits as going to charity.

Now it continues taking a sledgehammer to a peanut by using court action to stop small Christchurch-based retailer A Little Bit of Britain selling 300 boxes of the British breakfast cereal Weetabix.

Apparently, consumers would confuse Weetabix with the Sanitarium product Weet-Bix.

The possible confusion is of course a nonsense. The two products may be similar in name but one comes in a yellow box, the other in a red and blue one.

And 300 boxes of Weetabix is hardly going to make much of a dent in Sanitarium's profits – or its distributions to church charities.

So in reality, Sanitarium could easily move on with their near total dominance of the wheat biscuit breakfast cereal market in this country. If a few Poms want to pay an inflated price for a packet of wheat biscuits to be reminded of home, then good luck to them.

But there's principle at stake here.

For nearly 90 years, there's been an agreement that Weet-Bix can be sold in New Zealand, Australia and South Africa, while Weetabix will be stocked on supermarket shelves around the rest of the world. The two brands shall not impinge on the other's territory.

It's all to do with history.

Australian Bennison Osborne invented the wheat biscuit in the 1920's, with assistance from businessman Arthur Shannon and New Zealand marketer Malcolm Macfarlane, Osborne's Weet-Bix was sold by a company called Grain Products Limited.

But Mr Shannon sold Grain Products Limited – and the rights to Weet-Bix – to Sanitarium in 1928 (in Australia) and 1930 (in New Zealand). Osborne and Macfarlane were highly annoyed and went to South Africa.

But their erstwhile colleague Mr Shannon set up Grain Products Limited there too, and secured the rights for Sanitarium to sell Weet-Bix in that country as well.

Osborne and Macfarlane were not daunted. They formed the British and African Cereal Company, ever so slightly tweaked the recipe for Weet-Bix, and under the colonial rules of the era, were allowed to start operations in Britain from 1932 using the name Weetabix.

To say that Weetabix (as the company was renamed in 1936) now completely dwarfs Sanitarium is somewhat of an understatement.

From 2012, Weetabix was owned by Chinese government's Bright Foods – who also control Synlait Milk in Canterbury. In April this year Bright sold out to American based Post Holdings for $US1.4 billion.

Weetabix now sits in the same stable as other famous American breakfast brands like Shreddies and Shredded Wheat.

Sanitarium's actual worth is hard to assess because of its church and charity structure, but it appears as if its annual income is about $200 million.

So in the global breakfast cereal market, Sanitarium is a minor league player.

It wanted to export to China and the UK but has been stopped by... Weetabix.

Therefore you can sort of understand why Sanitarium is playing hardball here. What the A Little Bit of Britain stores are trying to do will actually make no difference to Sanitarium's bottom line for now, but it's the possible precedent it would set.

If Lisa Wilson and her three stores can get away with it, who's to say that Foodstuffs and/or Countdown won't start importing Weetabix by the container load and then Sanitarium could have a real problem.

Whether or not the New Zealand public could care less about such a problem is a moot point.

It's actually pretty hard to feel any sympathy for a company that pays no tax on profits and then bullies a small business operator.

Surely the end solution to all this, in these days of global free trade agreements, is to put a stop to these deals stretching back to the 1930's which prevent certain products from sale in certain countries.

Perhaps Sanitarium, for the sake of its public image and corporate reputation, should get in contact with Post Holdings and come to an agreement that both companies products can be sold anywhere.

Surely Weet-Bix, after being on this country's breakfast tables for 90 years, has enough of a reputation to withstand an invasion of imports.

Besides, Weetabix is crumbly, soggy and nowhere near as satisfying as locally made Weet-Bix.

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