Diageo settles Vodkat dispute

Diageo has reached an out of court settlement with drinks company InterContinental Brands (ICB) to bring an end to a two year saga over the latter's Vodkat product.

As part of the deal ICB has agreed to change the Vodkat brand name and packaging and make it clear that the product is not vodka.

ICB will also pay Diageo an undisclosed but "substantial sum in damages and legal costs".

Simon Litherland, Diageo GB's managing director, said: "We are pleased to have finally reached a settlement with ICB and that ICB has recognised that the use of the name Vodkat (or indeed any "Vod" prefixed brand name) on a product that is not vodka is likely to confuse consumers."

He added: "The original court decision and the decision of the Court of Appeal in July this year were important not only for Diageo but also for other vodka brand owners and producers and for vodka consumers.

"They will ensure that the vodka category can be protected from other "vodka lookalike" products both now and in the future and should help protect the long-term integrity of the vodka market in Great Britain."

A spokeswoman for ICB confirmed that it had reached a settlement with Diageo.

She said: "ICB has agreed to change the Vodkat brand name and packaging and will launch a new product from January/February 2011.

"There will be a separate announcement about the launch of the new product from ICB in due course."

ICB will be unable to ship stock of the existing brand out after January 31. However licensees and wholesalers are free to continue selling existing stock.