Heraldo de Madrid - Nespresso 'capsule war' grinds on with Swiss lawsuit

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Nespresso 'capsule war' grinds on with Swiss lawsuit

ECONOMY 16.01.2024

Nespresso 'capsule war' grinds on with Swiss lawsuit / Photo: TOBIAS SCHWARZ - AFP/File

A French television star and a group of investors are demanding 280 million Swiss francs ($330 million) from Nespresso after the failure of a company that tried to offer a more sustainable alternative to the aluminium capsules sold by the coffee-pod maker.

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Show host Jacques Essebag, who goes by the name Arthur, is leading the suit against the Nestle subsidiary, the group's lawyer Francois Besse told AFP on Tuesday, confirming a report in the Swiss daily 24 heures.

The suit groups 11 creditors of Ethical Coffee Company (ECC), which was founded in 2008 by a former Nespresso executive to make cheaper biodegradable capsules that were compatible with Nespresso machines.

ECC ceased activity in 2017 and went into bankruptcy in 2018 after facing repeated legal complaints from Nespresso, in what came to be known as the capsule war.

Nespresso won a blocking order on ECC just days after it began offering its capsules at an appliance chain store in 2011, and it was three years before it was lifted. By that time, other competitors had entered the market.

Legal struggles continued for years after that, according to Besse. The investor group is seeking damages and interest.

Nespresso, when contacted by AFP, acknowledged the lawsuit filed by ECC but said it did not comment on ongoing legal proceedings.

Besse wouldn't reveal Arthur's stake in ECC, but 24 heures said he'd spent 8 million euros between 2009 and 2010 for a five percent holding.

Nespresso had revenue of 6.4 billion Swiss francs in 2022, and dominates the market, especially after reaching an agreement with American coffee chain Starbucks in 2018 to sell capsules under its name in supermarkets.

O.Pardo--HdM

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