Own-label gravy maker Goldenfry Foods has won a three-year legal battle against three former senior employees who stole trade secrets to poach a £5m contract with Asda.
The ruling has effectively put Rotherham-based Frontier Foods, the company the former employees set up, out of business.
Goldenfry, which supplies own-brand products including gravies, sauces, cake mixes, stuffings and batters to all the multiples, has secured an agreement to purchase its rival's assets and an undertaking that Frontier will not compete in dried gravy for at least two years.
Frontier's alternative was to face paying liability costs in excess of £6m.
Leeds Mercantile Court heard that former Goldenfry technical director Malcolm Austin, customer service manager Paul Chapman and brands manager Rob Waddell all left Wetherby-based Goldenfry in 2006, although Chapman was retained as a consultant until January 2007.
But the court heard that by summer 2007 the three men had used insider knowledge and stolen documents to help them poach Goldenfry's Asda contract. At the time, 71% of Goldenfry's business was gravy granules and, of this, Asda's deal made up 25%.
Austin was singled out for having wrongly taken Goldenfry documents.
"We had no option but to litigate because what happened fundamentally undermined our business," said Peter Turrill, MD of Goldenfry. "The taking of our trade secrets threatened the livelihoods of people that had worked extraordinarily hard to make Goldenfry a market-leading company.
"The evidence against the individuals was compelling with the judge saying they were 'plainly prepared to lie', that they were 'unreliable' and that Malcolm Austin had 'wrongly retained documents' after he left our business."
The Grocer understands that Goldenfry has since re-won the contract to supply Asda following the instigation of the court proceedings.
The ruling has effectively put Rotherham-based Frontier Foods, the company the former employees set up, out of business.
Goldenfry, which supplies own-brand products including gravies, sauces, cake mixes, stuffings and batters to all the multiples, has secured an agreement to purchase its rival's assets and an undertaking that Frontier will not compete in dried gravy for at least two years.
Frontier's alternative was to face paying liability costs in excess of £6m.
Leeds Mercantile Court heard that former Goldenfry technical director Malcolm Austin, customer service manager Paul Chapman and brands manager Rob Waddell all left Wetherby-based Goldenfry in 2006, although Chapman was retained as a consultant until January 2007.
But the court heard that by summer 2007 the three men had used insider knowledge and stolen documents to help them poach Goldenfry's Asda contract. At the time, 71% of Goldenfry's business was gravy granules and, of this, Asda's deal made up 25%.
Austin was singled out for having wrongly taken Goldenfry documents.
"We had no option but to litigate because what happened fundamentally undermined our business," said Peter Turrill, MD of Goldenfry. "The taking of our trade secrets threatened the livelihoods of people that had worked extraordinarily hard to make Goldenfry a market-leading company.
"The evidence against the individuals was compelling with the judge saying they were 'plainly prepared to lie', that they were 'unreliable' and that Malcolm Austin had 'wrongly retained documents' after he left our business."
The Grocer understands that Goldenfry has since re-won the contract to supply Asda following the instigation of the court proceedings.
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