Nestlé Lawsuit May Ban Mexican Staples Like Abuelita Chocolate, Nescafé in the U.S.
Nestlé United States filed a lawsuit against distributor Ultra Distribuciones Mundiales SA de CV for bringing in “parallel imports” into the U.S. market. Meaning, they’re not happy about U.S. stores selling Nestlé Mexico products, which they say may confuse consumers.
So, that authentic, Spanish-labeled Abuelita hot chocolate that just hits different? It could be off grocery shelves soon.
According to Axios, the lawsuit is headed to federal courts this November. As per the suit, Nestlé USA finds an issue with the distributor importing Mexican products to the U.S. This includes Nescafé, Abuelita chocolate, Nido, La Lechera, Carnation and Media Crema.
Nestlé USA alleges that Nestlé Mexico products were never meant to be sold in the United States. And, that consumers should buy the U.S. versions of them instead.
As per the company, these duplicate products are harming their business. However, much of the public is claiming that these products just don’t hit the same.
What to know about the Nestlé USA lawsuit that might take Mexican Abuelita chocolate off the shelves
According to Law360, Nestlé USA filed a trademark lawsuit against Ultra Distribuciones Mundiales SA de CV back in March 2020. The suit refers to the distributor as a “free-rider,” alleging that they illegally sell “gray-market versions” of Mexican products in the U.S.
In Latino supermarkets, you might see different versions of Nestlé’s products, including the U.S. and Mexican versions of Nescafé and Nido. And if you go for the products imported from Mexico for “authenticity” — the ones with Spanish labels — well, Nestlé doesn’t seem too happy about that.
According to Nestlé USA, these Mexican products differ from the ones approved for U.S. shoppers. They say the distributor in question brings those products to the U.S. through Tijuana, Mexico.
“Ultra is a consummate ‘free rider,’ unfairly profiting off of the value of Nestlé’s trademarks,” the company alleges.
In fact, according to Axios, the Mexican versions of these products have slightly different recipes than their U.S. counterparts, such as sugar amounts. Therefore some people may think Nestlé Mexico’s products taste “better.” Even Nestlé USA’s complaint says there are “material differences” between the Mexico and U.S. versions.
Still, Ultra Distribuciones say the FDA and USDA approved the Mexican products. Nestlé USA seems to disagree, saying in the complaint that Nestlé Mexico goods “are not properly labeled in compliance with the Food, Drug, and Cosmetic Act and the Food & Drug Administration’s regulations and guidance.”
Still, as the distributor’s attorney described to Axios: “Consumers know exactly what they are buying — culturally familiar goods that in many cases remind them of home.”
Nestlé says Ultra’s actions have made them lose customers, which is why they’re trying to ban them from distributing their Mexican products. Will it work? Only time will tell… but you can still find us welcoming “Abuelita season” with the Mexican version. At least for the time being.
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