Australian dairy producer Bega Cheese   announced on Monday that the Supreme Court of New South Wales had ruled in its favor, dismissing a legal challenge brought by New Zealand’s Fonterra   over trademark licensing rights tied to a major divestment plan.

Last November, Fonterra’s Australian subsidiaries launched legal proceedings seeking confirmation that their planned divestment would not disrupt the existing trademark licensing agreements with Bega Cheese, while also seeking flexibility to amend certain control provisions.

Under the current licensing agreements, Fonterra is authorized to use Bega’s branding on select dairy goods, such as cheese and butter.

Earlier this year, Fonterra revealed plans to engage with prospective buyers for its global consumer and integrated businesses, which could involve asset sales or even an initial public offering.

The court’s decision could throw a wrench into Fonterra’s divestment strategy, particularly regarding the sale of its Oceania operations, by complicating potential revisions to its trademark arrangements with Bega.

"We look forward to collaborating with Fonterra Group regarding the sale of its Oceania businesses, where Bega Group stands as a logical and keen potential acquirer," said Barry Irvin, executive chairman of Bega Group.