FCCPC to sanction Coca-Cola, NBC for misleading consumers with products
By Mathew Brangyet
The Federal Competition and Consumer Protection Commission (FCCPC) has vowed to penalized Coca-Cola Nigeria Limited and the Nigerian Bottling Company Limited for misleading consumers of their products in the country with deceptive product labeling and failure to transparently manage non-harmful production error.
The Commission also observed that possible abuse of dominance violated the FCCPC Act 2018 (FCCPA) pursuant to Sections 17, 116, 123, 124, 127, and 155.
FCCPC, in a statement on Thursday in Abuja, recalled that In June 2019, 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.
The Commission found NBC applied deceptive trade descriptions to the two variance and supply these products to consumers violating Section 116 (3) of the FCCPA.
According to the consumer protection commission, the migration at the time, apparently followed previously concluded, but undisclosed and uncommunicated migrations with respect to their other brands – Fanta and Sprite as the Investigation discovered.
It explained: “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 opened a formal investigation accordingly between June 2019 and December 2020, the Commission and Coca-Cola as well as NBC engaged repeatedly, including seeking and securing vast internal documents and production logs to determine the veracity or otherwise of allegations that were subject of 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.”
FCCPC disclosed that one of the parties also attempted to 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 said, it has 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 Coca-Cola, NBC, and the FCCPC engaged in a lengthy process of building consensus around a mutually agreed differentiation and description of the different relevant products.
It said despite the extra time given to both companies as requested, they failed to meet up with the standards of the products.
The Commission added, “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.”
FCCPC said when it concluded the then open investigation, and again, engaged Coca-Cola and NBC with a view to providing sufficient remedies, saying, Coca-Cola despite this prolonged investigation, and multiple opportunities to comply with the law, have failed to do same.
Their internal documents show that they are aware of the evidence of the feedback that their efforts remain ineffectual.
Some of the Commission’s findings include: 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.
The Commission said it has reserved the question of Abuse of Dominance and quantum of the penalty appropriate under the FCCPA and Administrative Penalties Regulation 2020 (APR) for further regulatory action, and same will be imposed in due course.
