Mondelez International (MDLZ), the maker of popular snacks like Oreos, Chips Ahoy, and Wheat Thins, is suing grocery chain Aldi. Indeed, Mondelez believes that Aldi’s store-brand packaging looks too similar to its own and could confuse shoppers. The lawsuit, which was filed in a federal court in Illinois, claims that this could hurt Mondelez’s reputation and sales. As a result, the company wants the court to stop Aldi from selling these lookalike products and is asking for money to cover the damage.
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In the lawsuit, Mondelez showed side-by-side images comparing its products with Aldi’s. For example, Aldi’s Thin Wheat crackers come in a gold box that closely resembles Wheat Thins, and both Aldi’s chocolate sandwich cookies and Oreos are in blue packaging. Aldi’s Golden Round crackers also look similar to Ritz, which come in a red box. Therefore, Mondelez says that these similarities violate its “trade dress” rights, which protect the look and design of a product’s packaging.
It is worth noting that Aldi has not responded to the lawsuit yet. Interestingly, Aldi has faced similar lawsuits in other countries, such as Australia and the UK, where courts found it to have copied packaging designs. In addition, Mondelez says it reached out to Aldi multiple times about the similar packaging, and although Aldi changed or stopped selling some items, Mondelez says the company kept selling others that still look too similar to its brands.
Is MDLZ Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on MDLZ stock based on 13 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average MDLZ price target of $72.44 per share implies 7.3% upside potential.
