Lidl forces Tesco to a rebranding costing 8 million pounds

Lidl is the only one allowed to use yellow circles: a British appeal court forces Tesco – with explicit reluctance – to start a rebranding campaign costing almost ten million euros.

“Undisguised reluctance”

Tesco Clubcard holders pay a much lower price for a lot of products, a discount that is indicated in supermarkets with a large yellow circle against a blue background. However, the attention-grabbing labels will be a thing of the past soon after a complaint by the German discounter.

Lidl went to court, claiming that customers automatically think of the German chain when seeing a yellow circle on a blue background. Last year, a high court ruled that the Clubcard logo was indeed an infringement of Lidl’s trademark and that the chain was thus misleading its customers. It could lead consumers to think that Clubcard prices were advertised as being lower than at Lidl, the court found.

The appeal court now confirms the earlier ruling, The Guardian reports. However, the judge does to explicitly with “undisguised reluctance”, Judge Lewison makes clear. He does not agree that Tesco is insinuating a price comparison with Lidl with the Clubcard logo, but says that this point can no longer be disputed on appeal. As a result, Tesco now has to change the yellow logo, an operation it estimates to cost 7.8 million pounds. Moreover, the chain might have to pay a compensation to Lidl, as the discounter claims that the situation has lasted a year longer due to the appeal.