The Federal Competition and Consumer Protection Commission, FCCPC, has accused Coca-Cola Nigeria Limited and Nigerian Bottling Company Limited, NBC, of violating consumer protection laws.
The allegations include misleading trade descriptions, unfair marketing tactics, and failure to comply with regulatory requirements, according to a statement released by the FCCPC on Thursday, August 1, 2024.
The FCCPC’s investigation, which began in June 2019, revealed that Coca-Cola and NBC had altered the formulation of their Coke brand from regular sugar to non-nutritive sweeteners without informing consumers.
This change was part of a broader strategy that also affected their Fanta and Sprite brands.
Uncommunicated Formula Changes
“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),” the FCCPC stated.
The Commission’s statement detailed how these actions potentially violated provisions of the Federal Competition and Consumer Protection Act (FCCPA).
These violations included misleading trade descriptions, the use of unfair marketing tactics, and potential abuses of dominant market position in certain geographical areas of Nigeria.
Extensive Investigation and Evidence
The FCCPC opened a formal investigation in response to these findings and engaged extensively with Coca-Cola and NBC between June 2019 and December 2020.
This period involved obtaining vast amounts of internal documents and production logs to verify the allegations.
“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,” the statement said.
The Commission highlighted specific misleading communications, such as describing the Coca-Cola “Original Taste, Less Sugar” variant as identical to the original formulation, despite significant changes in ingredients.
Attempts at Compliance and Final Order
Initially, Coca-Cola and NBC sought to resolve the issue by adopting clearer product descriptions and differentiation.
However, the FCCPC noted that on the eve of the compliance deadline, the companies abandoned the agreed-upon strategy, opting instead for 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,” the statement continued.
As a result, the FCCPC concluded its investigation and served a Final Order on Coca-Cola and NBC on July 29, 2024. The order detailed several findings, including:
Misleading Trade Descriptions: Continuing to mislead consumers into believing that Coca-Cola Original Taste is not materially different from Coca-Cola Original Taste “Less Sugar,” in violation of Section 116 FCCPA.
Unfair Marketing Tactics: Marketing Coca-Cola Original Taste Less Sugar in packaging that is either indistinguishable or not sufficiently distinguishable from Coca-Cola Original Taste, contrary to Sections 123(1)(a), (b), and (c) and Section 124(1)(a) of the FCCPA.
Consumer Impact and Future Actions
Despite multiple engagements and opportunities to comply, Coca-Cola and NBC have not met the FCCPA standards, according to the Commission.
The FCCPC emphasized that the current market status and consumer feedback indicate the ineffectiveness of the differentiations adopted by Coca-Cola and NBC.
“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,” the statement added.
The FCCPC’s Final Order seeks to enforce compliance and protect consumers from misleading practices.
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