Icelandic supermarket ends decade-long trademark dispute with Iceland and offers “proximity discount.”
British supermarket chain Iceland has officially ended its decade-long legal battle with the Nordic country of the same name, drawing a line under one of Europe’s most unusual trademark disputes and promising a gesture of goodwill to Icelandic consumers.
The frozen food retailer confirmed it would refrain from taking further legal action after suffering its third defeat in European courts last year. Instead of continuing the costly dispute, the company plans to use funds set aside for further litigation to offer a so-called “proximity discount” to buyers in Iceland.
Richard Walker, chief executive of the supermarket group, said the decision was a pragmatic end to a legal battle that had dragged on for almost a decade and cost a lot of time and resources.
Speaking to the Financial Times, Walker said the company would redirect money that would have been spent on further legal action and offer Icelandic consumers shopping vouchers that they could redeem at the retailer’s stores.
“We lost for the third time. We’re going to throw in the towel,” Walker said. “Actually it’s fine, we don’t have to change our name.”
He added that legal costs for another round in the European courts would have amounted to a few hundred thousand pounds, money the company now plans to spend on the goodwill initiative instead.
The legal conflict began in 2016 when the Icelandic government initiated proceedings against the British supermarket chain over the EU-wide trademark registration of the word “Iceland”.
The country argued that the supermarket’s ownership of the brand prevented Icelandic companies from properly promoting their products abroad under the country’s name, potentially limiting exports and international branding opportunities.
Officials in Reykjavík called for geographical names to remain available for public use and not be monopolized by private companies for commercial purposes.
The dispute quickly became a high-profile case in European intellectual property law, raising broader questions about the use of place names as trademarks and the rights of countries to promote their own national identities in international markets.
In July 2025, the EU court ruled against the supermarket chain, upholding an earlier decision to cancel its EU trademark for the word “Iceland”.
The court concluded that geographical names should remain accessible to companies and organizations associated with that location and cannot normally be reserved exclusively by a single company.
The ruling effectively stripped the British retailer of its exclusive EU trademark rights, although the ruling did not require the supermarket to change its name.
Walker acknowledged that the legal defeat raised new concerns for the company – the possibility that competitors might try to use the name in the future.
“Other people now have the opportunity to open stores, call it Iceland and carry Icelandic products,” he said.
Despite this risk, the retailer has decided not to pursue further legal action, thereby ending the long-running dispute.
As part of its efforts to resolve the dispute, Icelandic management plans to introduce a special discount system for Icelandic consumers.
The proposed initiative would include shopping vouchers that Icelandic residents can redeem at the retailer’s stores, symbolizing a more collaborative relationship between the brand and the country.
The company has not yet confirmed when the vouchers will be available or how they will be distributed, but executives say the gesture is intended to mark an end to hostilities and promote goodwill.
The move also reflects the retailer’s desire to avoid further reputational damage from a legal battle that has drawn widespread international attention.
The decision to end the dispute comes at a time of leadership change in the supermarket group.
Richard Walker took over as CEO in 2023, succeeding his father Malcolm Walker, who co-founded Island in 1970 and led the company for more than five decades.
The younger Walker has increasingly positioned himself as a public advocate for economic and social issues in Britain. Earlier this year he was appointed as the UK government’s cost of living advocate and was also appointed as a Labor peer by Prime Minister Keir Starmer.
Before this appointment he was known as a supporter of the Conservative Party.
The Icelandic supermarket chain began as the only frozen food store in Oswestry, Shropshire, specializing in loose frozen products.
Over the decades it quickly became one of Britain’s best-known budget food brands.
Today the company operates more than 900 company-owned stores across the UK, trading under the Island and The Food Warehouse brands.
The company also operates franchises internationally, including locations in the Channel Islands, Spain and Portugal.
Beyond supermarket operations, the group owns the restaurant company Individual Restaurants, which operates brands such as Piccolino and Restaurant Bar & Grill.
Iceland was listed on the London Stock Exchange for several decades after its initial public offering in 1984.
During this time, the company rebranded as The Big Food Group and expanded into multiple food retail formats.
However, in 2012 the company returned to private ownership following a £1.45 billion management buyout led by Malcolm Walker and South African investment firm Brait.
Walker and long-time CEO Tarsem Dhaliwal then bought out Brait’s shares in 2020, giving the management team full control of the company back.
Dhaliwal himself has been closely linked to Iceland’s growth, having joined the company in 1985 as a trainee accountant before rising to managing director.
By abandoning the trademark dispute, Iceland’s leaders hope to draw a final line under a legal battle that has lasted nearly a decade and caused a stir across Europe.
For the supermarket chain, the decision represents a pragmatic recognition that the legal battle has run its course and that restoring ties with Iceland may ultimately be more valuable than continuing a costly court battle.
The planned “proximity discount” for Icelandic shoppers now represents a symbolic gesture aimed at turning a long-running dispute into a moment of reconciliation between the British retailer and the Nordic country whose name it bears.
