Lifeway Foods has ended its legal action against Pure Culture Organics, its rival US kefir maker has announced.
In April, Lifeway filed a lawsuit against Edward and Ludmilla Smolyansky claiming they stole proprietary information when they set up Pure Culture Organics.
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Edward and Ludmilla are the brother and mother of Lifeway CEO Julie Smolyansky. They also used to work for Lifeway.
The suit alleged that “instead of competing fairly against their former colleagues and family member, [the] defendants decided to cheat by stealing the formula from Lifeway and trading on its long-established and credible good name”.
Lifeway also claimed Edward Smolyansky broke a confidentiality clause in a separation agreement with the company when he left the business.
In a statement issued yesterday (27 June), Pure Culture Organics said Lifeway had “chosen to dismiss its claims against PCO rather than proceed to a ruling on the merits”.
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By GlobalDataEdward Smolyansky, Pure Culture Organics’ president, added: “We are extremely pleased Lifeway abandoned its lawsuit, and PCO can pivot from having to focus on beating back frivolous lawsuits to building on the momentum of its new product developments like PCO Kids kefir, as well as beginning to build our sales and marketing team.”
Just Drinks has contacted Pure Culture Organics for details on its efforts to expand the presence of its emerging range of products.
This publication has also asked Lifeway to comment on the legal action.
The suit was the latest row between the Smolyanskys. Two years ago, Edward and Ludmilla went public with their request for Julie to be removed as Lifeway’s CEO. In a matter of months, a resolution was struck with the company agreeing to review strategic alternatives for the business and a shake-up of its board.
However, Edward and Ludmilla left Lifeway last year and established Pure Culture Organics. Its product range was launched at the Natural Products Expo West trade show in California in March.
In March 2022, Edward and Ludmilla had moved to remove Julie Smolyansky as the company’s CEO as they wanted the company to pursue “strategic alternatives”.
A few months later, Lifeway revealed that the family feud was over as it had agreed to review strategic alternatives and a shake-up of its board.
However, in 2023, Ludmilla resigned from the board “due to a disagreement with the board about her opinions on the business and management”, according to an 8-K filing Lifeway made with the SEC.
In June last year, a Lifeway shareholder urged the company to sell itself after not seeing the pursuit of the previously agreed “strategic alternatives”.
Dairy giant Danone owns a 24% stake in Lifeway.
