The Federal Competition and Consumer Protection Commission (FCCPC) Thursday accused Coca-Cola Nigeria Limited and Nigerian Bottling Company Limited (NBC) of violating consumer protection laws.
FCCPC, in a statement signed by its management, accused the two companies of misleading trade descriptions, unfair marketing tactics, and failure to comply with regulatory requirements.
The investigation, which began in June 2019, revealed that the companies had secretly changed the formulation of their Coke brand from regular sugar to non-nutritive sweeteners without informing consumers.
FCCPC, disclosed that it became aware that Coca-Cola and NBC had commenced a migration of their Coke brand from a formulation that included regular sugar to non-nutritive sweeteners in 2019, adding that the companies had engaged in similar practices with their Fanta and Sprite brands.
"The migration at the time, though not concluded, apparently followed previously concluded, but undisclosed and uncommunicated migrations with respect to their other brands, to wit: Fanta and Sprite (as the Investigation will later discover)," FCCPC stated.
"The strategy and conduct at the time appeared to possibly infringe FCCPA provisions prohibiting misleading trade descriptions, unfair marketing tactics, and questions whether some pricing strategies in certain geographical areas of Nigeria were on account of market power in the geographic areas, and as such constituted abuse of dominant market position."
The Commission also stated that it opened a formal investigation in response, and that between June 2019 and December 2020, the Commission and Coca-Cola, as well as NBC, engaged repeatedly, including seeking and obtaining vast internal documents and production logs to determine the veracity or otherwise of allegations under investigation or explanations provided by Coca-Cola and NBC.
"By December 2020, the Commission was convinced based on the evidence that Coca-Cola and NBC on multiple occasions and counts violated and remained in violation of the FCCPA, particularly with respect to transparency and clear disclosure obligations to their product patrons, intentional communications in describing their Coca-Cola "Original Taste, Less Sugar "variant as one and the same, as well as unchanged, when in actual fact, same had indeed changed, was different, differently formulated and not the same as their otherwise "classic, or "Original Taste". One of the parties also attempted to, or misled the Commission under Section 112 of the FCCPA."
"Coca-Cola and NBC initially sought to end the investigation and regulatory process by adopting clearer, more transparent and truthful descriptions and differentiation of the relevant variants of their products. The Commission granted this accommodation, and also gave Coca-Cola and NBC the opportunity and prerogative to propose remedies including descriptions and product differentiations that comply with applicable statutory standards,"
However, on the eve of the compliance deadline, FCCPC alleged that Coca-Cola and NBC abandoned the agreed-upon strategy in favour of a different approach that failed to meet regulatory standards.
"Over the next years, it remained abundantly apparent that Coca-Cola and NBC's meritless efforts failed, and it became clear to the Commission that neither Coca-Cola, nor NBC desired or intended to provide transparency to consumers in a manner that complied with the standards in the FCCPA.
"Accordingly, the Commission concluded the then open investigation, and again engaged Coca-Cola and NBC with a view to providing sufficient remedies. Coca- Cola despite this prolonged investigation, and multiple opportunities to comply with the law, have failed to do same.
"Despite multiple and repeated further engagements with Coca-Cola, NBC and their respective retained legal practitioners, the current market status and consumer feedback clearly demonstrate the colossal ineffectiveness of the milder and weak differentiations Coca-Cola and NBC have adopted. Their internal documents show that they are aware of the evidence of the feedback that their efforts remain ineffectual. Coca-Cola and NBC have however made more spirited efforts at other interventions to address the regulatory concerns than measures to ensure compliance, and discharge from the regulatory process."
FCCPC also announced that it has entered, issued and served its Final order on Coca-Cola and NBC on Monday, July 29, 2024.
The Final Order contains the Commission's findings, some of which include the following:
Misleading trade descriptions under Section 116 FCCPA by continuing to mislead consumers to believing Coca-Cola Original Taste is not materially different from Coca-Cola Original Taste "Less Sugar."
Unfair marketing tactics: Contrary to Section 124(1)(a) of the FCCPA, Coca-Cola Nigeria markets Coca-Cola Original Taste Less Sugar in packaging first, indistinguishable, and now not sufficiently distinguishable from Coca-Cola Original Taste, contrary to Sections 123(1)(a), (b), and (c) of the FCCPA. (Guardian)
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