Aldi is selling a caterpillar-shaped chocolate cake that looks too much like M&S’ own caterpillar-shaped chocolate cake.
The supermarket chain Marks & Spencer is suing its competitor Aldi for stealing M&S’ intellectual property (IP). IP is an example of property rights. It allows people and companies to claim ownership of ideas and other intangible products of the human mind.
Property rights are a really important part of economics. They determine who gets to control the use of a resource, and they’re enforced by the state via the justice system. There are all sorts of debates about the pros and cons of different types of property rights, including whether we should have them in general.
One common ‘con’ is that property rights are designed to restrict access to stuff, and that the people most likely to face those restrictions are those who are already marginalised in some way - because they’re low-income, say. By selling its own caterpillar cake, Aldi increases access to insect-shaped deserts in two ways: (1) it becomes more convenient to get hold of for anyone who lives nearer to an Aldi store than an M&S one, and (2) because Aldi’s version is cheaper it may fit into smaller budgets.
On the other hand, it was M&S who had the creativity to come up with the caterpillar cake concept, and who spent time and money marketing it and building up its popularity. Allowing a rival business to simply steal the idea could therefore be regarded as both unfair and as a disincentive for businesses to invest in creating cool new products in the future. Shoppers could consequently suffer (just imagine the horror of having to celebrate milestone events with a plain old Victoria sponge).
An interesting twist in this case is that Aldi isn’t actually the first supermarket to jump on the bug-cake bandwagon. Since M&S launched ‘Colin the Caterpillar’ in 1990, Morrisons, ASDA, Tesco, Sainsbury’s and Waitrose have all made their own caterpillar cake creations. So why is M&S going after Aldi specifically?
Well, its lawsuit argues that the products are so similar that it could “lead consumers to believe they are of the same standard”. M&S therefore seems to be suggesting that they don’t want people eating Aldi’s terrible cake at a party and mistakenly thinking it’s an M&S product. After all, that could dent Colin’s reputation, which is currently pretty stellar. Whether this is a fair concern or some veiled snobbery from a supermarket generally considered to be pretty bougie isn’t yet clear, but we can think of one way to find out for sure... Who’s up for a taste test?
…and more importantly, what on earth is economics? This whole website is about starting a conversation about what economics is and could be. To work that out, we’ll need to look back at how this discipline emerged in the first place, what so-called ‘economists’ do, and what the future of economists could look like if we all became ‘citizen economists’.