Who: Coca-Cola and the Mexican regulator (the Procuraduria Federal del Consumidor)
When: Complaint from the Mexican campaign group “Consumer Power” launched in February 2015. Decision of the Mexican Appeal Court expected in mid-2016.
Law stated as at: 21 January 2016–
A report from The Guardian newspaper in December 2015 revealed that the American soda giant Coca-Cola came under fire in Mexico after a local campaign group, “El Poder des Consumidor” (EPC ie “Consumer Power”) launched a complaint against it, arguing that Coca-Cola’s advertising campaign for its soda drink “Sidral Mundet” (Sidral) was misleading, and promoted the soda as a healthy drink “made from apples”, despite its high sugar content.
The popular Mexican fizzy drink, containing 60 grams of sugar in each 600ml bottle, has been known to the Mexican consumers since 1902 and was bought by Coca-Cola in January 2002.
At the beginning of last year, Coca-Cola started a new advertising campaign on billboards, buses and delivery vans which some felt to suggest that the apple-flavoured drink was made from fresh apples, with adverts and labelling bearing the slogans “with apple juice” or “with pasteurized juice”. The American giant also created more than 70 videos posted on the company’s Youtube page in Mexico, portraying Sidral as a healthy choice. One video saw a whole red apple emerging from a flower pot after being watered with Sidral, while another described the fizzy drink being made through mixing an apple in a cocktail shaker.
In February 2015, the EPC reported Coca-Cola to the Federal prosecutor’s office for consumer rights, the “Procuraduria Federal del Consumidor” (Profeco), accusing the company of intentionally misleading its consumers about the so-called healthiness of Sidral. The complaint prompted Profeco to ask Coca-Cola to clarify:
- whether Sidral was in fact an apple juice or an apple-flavoured fizzy drink;
- how much apple juice the drinks in fact contained; and
- whether the use of the term “pasteurized” in its adverts was appropriate (which, the EPC claimed, would normally apply to fruit juices as opposed to sodas).
In response, Coca-Cola moved to stop Profeco’s investigation by making an application for an injunction before the Mexican Administrative District Court in March 2015, arguing that its constitutional right to a fair trial had been violated and that Mexico’s federal consumer rights law was unconstitutional. The American drinks giant also claimed that its Mexican subsidiary dealing with its publicity and labelling, “Propimex”, should be brought into the firing lines in its place.
For seven months thereafter, and pending a ruling of the Court, the claim from the EPC was suspended, therefore allowing Coca-Cola to carry on its advertising campaign for Sidral, a tactic which the EPC considered an abuse of the Mexican constitutional system and a manoeuvre aimed at delaying Profeco’s investigation into the Sidral’s campaign.
In July 2015, the Mexican District Court rejected Coca-Cola’s unconstitutionality claim. This prompted Coca-Cola to 1) withdraw from its advertising materials and videos all references to the drink being made “from apples”, and 2) launch a new campaign promoting Sidral as a traditional, domestically-produced soda.
However, Coca-Cola still went on to lodge an appeal against the decision to the Mexican Appeal Court, arguing that the company was merely executing its “right of defense as provided by law” and it was not a “delaying tactic” on their part.
The Mexican Appeal Court decision is not expected to be rendered before mid-2016. In the meantime, a spokesman for Coca-Cola reported that “there was a modification of the logo and labelling” of Sidral to “reinforce [Coca-Cola’s] commitment of encouraging informed purchase decisions”.
Why this matters:
According to Alejandro Calvill, director of EPC reporting in the Mexican newspaper “SinEmbargo”, Mexico’s relaxed attitude to advertising regulation makes it easier for giants such as Coca-Cola to allegedly take advantages of weak advertising and labelling laws. The complaints procedure can be so long and cumbersome, said Calvill, and even when they do result in fines, these are so small, that companies tend not to see these as a deterrent for launching allegedly misleading campaigns.
According to The Guardian, Mexico is plagued with the highest child and adult obesity rates in the world and 14% of adults are diabetics. It also has the highest per capita soda consumption rate in the world with each year, Mexicans drinking on average 163 litres of sugary fizzy drinks each – amounting to nearly half a litre every day.
Therefore, it will be interesting to find out whether the Mexican Appeal Court uses its power to allow Profeco’s official investigation into Coca-Cola’s advertising campaign to continue.