Multimillion-dollar nappy scrap unfolds in court as Zuru’s Nick Mowbray prepares to take stand

Tuesday, 5 August 2025

The High Court in Auckland has begun a civil trial to sort out a multimillion-dollar nappy dispute between Zuru billionaire Nick Mowbray’s Rascals nappy company, and the company which swooped in to buy the Treasures nappy brand from “under Rascals’ nose”.

Zuru and Zuru-owned Rascals International, a British Virgin Islands-based company headquartered in Hong Kong, are suing Auckland-based JJK, and related company Taonga IP, for damages.

Zuru and Rascals claim JJK conspired with a Rascals’ director, and used confidential information from Rascals supplied by that director, to buy and develop the Treasures brand, setting back Rascals’ expansion into Woolworths’ supermarkets.

Campbell Walker KC, counsel for Zuru and Rascals, said that director was Grant Bruce Byron Taylor, who was being sued by Zuru, but had settled the claim against him before Monday’s hearing began.

But Sam Lowry, counsel for JJK, said the company’s directors acted in good faith at all times, received no confidential information, and that Taylor had only helped JJK with high level “mentoring”, as he had been successful in the nappy trade.

Zuru and Rascals are seeking millions of dollars in damages, but JJK is counter-suing for losses Lowry said it suffered as a result of a call Mowbray made to Woolworths in which he said “Mr Mowbray requested Woolworths delay stocking Treasures nappies”.

“His purpose was very transparently to keep Treasures off the shelves, and it worked,” Lowry said. “Woolworths cancelled JJK’s initial purchase orders… and the cause of that was Mr Mowbray’s intervention. Worse than that from JJK’s perspective, Woolworths renegotiated its terms of trade.”

The dispute has revealed details of how the supermarket duopoly of Foodstuffs (Pak‘nSave, New World and Four Square) and Woolworths (Countdown, Fresh Choice and SuperValue) use exclusive brand deals in a bid to earn higher margins from new parents for products like nappies.

Zuru’s launch into nappies followed a conversation between old school friends Mowbray and Taylor during a holiday.

Mowbray, who is due to give evidence on Tuesday, agreed to teach Taylor how to make Rascals profitable using Zuru’s business model, the detailed specifics of which were suppressed by Justice Dani Lee Gardiner.

However, it involved manufacturing in a high-tech factory in China, targeting style-conscious parents, pumping the brand through intensive digital marketing and offering supermarkets a bigger margin than other nappy makers could.

Zuru invested in Rascals in 2017. By 2019, it was doing $10 million a year in nappy sales, securing a big market through Foodstuffs’ supermarkets. And in 2020, Zuru bought complete ownership from Taylor and his family, for $30m.

But Rascals’ nappies were sold in Foodstuffs under an exclusivity deal, so Zuru and Rascals needed another brand to sell in Woolworths supermarkets.

Struggling rival nappy brand Treasures was selling its nappies under an exclusive deal with Woolworths, and Walker said Zuru felt the “Rascals’ model” it had developed could be applied to it, enabling Zuru to crack “the other half of the duopoly”.

Early in 2020, Rascals began to look at buying the Treasures brand, but unbeknownst to Mowbray and Rascals, the Taylor family was “negotiating to buy this Treasures opportunity from under Rascals’ nose”, Walker said.

Those negotiations ended with no deal being done, but Taylor then helped JJK to buy the Treasures brand in August 2020, said Walker, and he kept his dealings with JJK and its directors secret from Rascals.

“There is no way they [JJK] would have made an offer for Treasures unless they had been given this leg up,” Walker said.

None of the JJK directors had worked in the nappy industry, and they drew their nappy expertise from Taylor, who had learned everything he knew at Rascals.

Taylor owed directors’ duties to Rascals while he was engaged in negotiating to buy Treasures, and with JJK, but he did not disclose his dealings, Walker told the court.

And after Taylor ceased to be a Rascals’ director, a non-compete clause banned him from working for rivals in the nappy industry.

Walker said Taylor and one JJK director deleted documents related to their dealings, which indicated they knew their communications were wrong, though Lowry dismissed it as “extraordinarily poor judgment”, partly the result of a mental health crisis Taylor was having.

After missing out on buying Treasures, it wouldn’t be until early 2025 that Zuru and Rascals were able to launch the Millie Moon brand to break into Woolworths, Walker said.

Part of the reason was that Foodstuffs contract with Rascals gave it a 120-day right of refusal on any new products from Rascals, which included the Millie Moon line developed to be sold in the stores of its rival Woolworths.

Walker told the court the delay of breaking into Woolworths had cost Rascals and Zuru millions of dollars.

However, Lowry said Rascals had made no real offers for Treasures, only sent tyre-kicking speculative inquiries.

He said Rascals’ claims of millions of dollars of loses as “extraordinary, and not in a good way”.

Lowry told the court there being “bad blood” between Taylor and Mowbray following Zuru’s purchase of Rascals.

The court heard that in February 2021 Mowbray discovered the Treasures brand had been sold, and discovered who had bought it. Mowbray emailed one of JJK’s directors Kirk Penney, the former New Zealand representative basketballer, voicing his suspicion that Taylor had been passing trade secrets.

Mowbray warned Penney, who ceased to be a director of JJK last year: “This will get messy, if this is the case“.

Zuru co-founder, Mat Mowbray told Taylor he believed he had helped JJK acquire Treasures.

“Zero to do with me,” Taylor replied, Walker said.

Walker said in Mowbray’s 2021 call to Woolworths, the businessman told the supermarket giant what he understood “JJK and Mr Taylor had been up to”.

Lowry said JJK says the statements Mowbray made in the call were false or misleading.