Pineapples and papayas are the weapons of choice in a global fruit fight under way in federal court in Manhattan. The point of the struggle? Deciding whether the fruit in plastic containers on refrigerated shelves in grocery store produce sections is fresh — or processed.
According to licensing deals, Del Monte Foods has the right to sell canned fruit and vegetables.
The dispute sets Fresh Del Monte against Del Monte Foods. The two companies were created out of what had been a single Del Monte after the takeover of its corporate owner, RJR Nabisco, in 1989.
Under the terms of two licensing agreements between the two companies, Fresh Del Monte has the right to sell “fresh fruit, fresh vegetables and fresh produce” under the Del Monte name, while Del Monte Foods has the right to sell canned and preserved fruits, vegetables and produce.
That might seem like a fairly straightforward division of the spoils, but the two companies have fought over those terms ever since, each accusing the other of encroaching on its turf. The bitter arguing, the turnover of lawyers and the stacks of legal briefs have come to resemble the case at the heart of Charles Dickens’s “Bleak House.”
In the current lawsuit, being heard before Judge Sidney H. Stein in Federal District Court in Manhattan, Fresh Del Monte charges that Del Monte Foods breached the contracts between them by selling various cut and prepared fruit products under the names Orchard Select, Fruit Naturals and SunFresh. The fruit is sold in plastic tubs on refrigerated shelves in produce sections of grocery and convenience stores.
Fresh Del Monte argues that by selling those products in the produce section — sometimes with the words “must be refrigerated” on the labels — Del Monte Foods is misleading and confusing consumers, who may mistake the contents of the packages for fresh fruits.
If the products need to be refrigerated to prevent spoiling, Fresh Del Monte argued in its court filings, they would be fresh fruit under the terms of the licensing agreement.
And in any case, Raoul Kennedy, the company’s litigator, argued in court, the contract and a previous court opinion gives Fresh Del Monte, not Del Monte Foods, the exclusive right to sell refrigerated pineapple and other fruits, including melons, berries, papayas and bananas “peeled, cut and cored.”
Mr. Kennedy said that if Del Monte Foods wanted to sell peanut butter in the produce section, Fresh Del Monte would not have a problem with it because consumers would not mistake peanut butter for “fresh melon.”
“We’re talking about things that have this carefully contrived perception of freshness to deliberately confuse people,” he said.
In keeping with the spirit of the fight, Del Monte Foods portrayed the lawsuit in court filings as “a classic case of sour grapes.”
Arturo J. Gonzalez, a lawyer for Del Monte Foods, told the jurors that although the company had been selling cut, processed and refrigerated fruit products since 1998, it had heard no complaint from Fresh Del Monte until 2008, when the fresh produce company’s sales began slipping. “We beat them in the market,” Mr. Gonzalez said. “Their product just doesn’t sell.”
As evidence he cited a January 2009 e-mail from a Fresh Del Monte employee, describing to a national account executive how the Shaw’s grocery stores in his neighborhood had moved the company’s products to the lowest refrigerated shelves and replaced them with Del Monte Foods’ Superfruit cups “by the hundreds.”
“When I talk to the produce guys at the stores, they say our stuff just doesn’t sell,” he wrote.
Mr. Gonzalez said Fresh Del Monte had offered no empirical evidence that consumers mistook Fruit Naturals or any other of his client’s refrigerated and preserved fruit products for fresh fruit. Most people, he said, know that fruit visibly packed in liquid and labeled as containing sodium bicarbonate and other preservatives is not fresh.
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