Oat-based products cannot be sold as 'milk', court rules

The Swedish oat drink company Oatly lost a final legal battle in Stockholm on Wednesday after the Swedish Patent and Market Court of Appeal ruled that the firm cannot market its plant-based products using the term "milk." The decision follows years of intense litigation initiated by the Swedish dairy industry, which argued that the label misled consumers and violated European Union regulations regarding the designation of dairy products. This ruling solidifies the legal boundary between traditional dairy and plant-based substitutes within the Swedish market, forcing the global brand to permanently alter its branding strategies. The dispute originally intensified when LRF Mjölk, a trade organization representing the Swedish dairy sector, filed a lawsuit claiming that Oatly’s marketing tactics unfairly disparaged cow's milk while co-opting its terminology. While Oatly argued that consumers are well-aware that oat drinks do not contain animal products, the court ultimately sided with the dairy lobby. The judges maintained that the term "milk" is legally reserved exclusively for the mammary secretions of animals, adhering to a 2017 European Court of Justice precedent that restricted dairy-related names like "butter," "cheese," and "milk" to animal-derived goods. This legal blow is expected to have significant implications for how alternative protein companies operate across Europe. Historically, Oatly has used provocative marketing to challenge the dairy industry, but this ruling imposes strict limitations on their linguistic choices in their home country. The company must now ensure that its packaging and advertising materials refer to their products as "drinks" or "beverages" rather than "milk," or risk facing substantial financial penalties. The case highlights the ongoing friction between the rapidly growing plant-based sector and traditional agricultural industries over market share and consumer perception.