A bitter ‘milk war’ that has engulfed the Midlands has left a Wolverhampton dairy facing payouts adding up to millions of pounds after spying on its rival.
Wolverhampton-based Johal Dairies will be going to the High Court to hear what damages it will have to pay after losing an appeal against JN Dairies.
It is believed to be facing damages of £1 million or more – on top of an estimated £700,000 in legal costs for JN and a similar amount for itself.
Johal Dairies was originally convicted of industrial espionage after it paid a disgruntled former employee of JN £40,000 to steal invoices and customers from the company.
But Johal refused to accept the verdict in March 2009, and has appealed twice, each time ramping up legal fees. The firm has already been told it has to pay a total of £450,000 in costs to its rival, but more is expected to come, as well as the damages.
Manrupe Singh Nijjar, the general manager of JN Dairies, said: “They stole our entire customer details and that’s the single most important piece of information in the business. This has been dragging on for a while now, we won at the high court, they appealed back, but we came out successfully and we were due to go back to the high court but they tried to strike out our damage claims.
“It’s been a very expensive process. The High Court trial lasted for eight days and included QCs and barristers. There is still a substantial amount of costs we are seeking to recover from them. It’s a huge amount of money and all over some bottles of milk.”
JN and Johal are two of the largest names in the dairy business and both cover an area spanning most of central England and beyond.
In the first court case, a judge heard that Johal had paid illegal immigrant and former JN employee Gurbir Singh £40,000 to steal information on volumes, addresses and prices from JN Dairies, shortly after he stopped working for them on the daily round.
He also continued doing his rounds and approached JN customers directly, trying to persuade them to switch to Johal services.
The firm denied the accusations in court but a number of customers testified they had been offered cheap or free milk to sign up to Johal dairies.
Johal appealed against the initial judgment in the Court of Appeal in March 2010 but lost.
It went to court most recently to get the damages claim struck out, but lost again at the hearing. Johal Dairies were ordered to pay JN Dairies’ costs for the June 15 hearing. The hearing to decide on damages is set to be held at the end of the year or at the start of 2011.
After the most recent case, the directors of JN Dairies said: “JN Dairies operates in a very competitive market. It is obviously extremely valuable for one company to know who its competitors are supplying, how much product they are supplying, and at what price.
"It is then extremely easy for them to undercut to gain the business.
“That is exactly what Johal Dairies did to JN Dairies in November 2008 and these attempts have continued since then.
"We are pleased that the Court has rejected Johal Dairies’ attempt to strike out JN Dairies’ damages claim, and we will now press for our due compensation.”
Johal Dairies could not be reached for comment.