Coca-Cola Hit With “Tobacco-Style” Lawsuit. Who Else Is at Risk? 

 

Rich Duprey
Coca Cola Coke Soda Beverage Carbonated Drink Kid Child Bottle Flickr Kim Stromstad

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Coca Cola Coke Soda Beverage Carbonated Drink Kid Child Bottle  

Put down that soda! According to a lawsuit filed against Coca-Cola (NYSE: KO),

the carbonated drink is just as dangerous to your health as a cigarette. Well,

maybe not quite, but the soda giant and the American Beverage Association

(ABA) are being sued by consumer activists who say their actions are just as

bad as what the tobacco giants did, and they should be similarly punished.

 

While the implications for Coca-Cola and the rest of the soda industry are

obviously huge should the lawsuit be successful, that risk would actually

multiply exponentially because of what it would mean for the rest of the

food and beverage industry. Triumphant trial lawyers likely would not just

stop at soda, but would also attack other beverages they deemed unhealthy

— energy drinks, anyone? — as well as processed food manufacturers, candy,

ice cream, and snack makers.

 

A smoking gun?

The complaint filed by the nonprofit organization Praxis Project accuses Coke

and the ABA of deliberately misleading consumers over the health effects of

soda. It charges that they colluded to confuse people about the science linking

sugary drinks with obesity, type 2 diabetes, and cardiovascular disease. It says

they chose to deflect attention from soda being the cause of such illnesses onto

a lack of exercise as the likely cause, and maintained a fake news campaign that consumers could “balance” their intake of soda as part of an overall dietary

regime of health.

The tactics are similar to how lawyers went after the tobacco companies. In

the 1950s, tobacco companies routinely defended themselves against claims

that cigarettes caused cancer by denying there was a link, or by suggesting

other factors caused cancer. In the 1980s, the tobacco companies argued

smokers knowingly assumed the risks of cancer, or other health problems,

when they began smoking, but it wasn’t until a third phase of lawsuits filed

against tobacco companies when it emerged the the tobacco companies had

actually been aware of the addictive nature of tobacco.

In 1998, the attorneys general of 46 states settled with four of the largest

tobacco companies under a Master Settlement Agreement that remains in

effect today, and through which tens of billions of dollars have been paid out.

Cigarettes Smoking Tobacco Altria Mo Marlboro Flickr Claudio Toledo

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The Coca-Cola lawsuit even references those tobacco cases, and charges

the soda giant’s response to the health claims was one of “cultivating

relationships” with scientists to “balance the debate,” just like the tobacco

industry did when it formed the Tobacco Industry Research Committee

to counter the science linking smoking to cancer.

Think of the children

The suit also claims that Coke targets kids with its advertising — just like

the cigarette companies — as a way “to replenish the ranks of its customers,

and it tries to recruit them young.” Similar to tobacco’s Joe Camel, which was

said to be a subtle call to lure children into smoking, the suit points to Coke’s

animated polar bear advertising through a link to a website put up by the

Center for Science in the Public Interest called The Real Bears, which warns

of the dangers of soda consumption by playing off the polar bears.

Coca Cola Coke Ko Soda Beverage Drink Carbonated Polar Bear Ad Source Coca Cola

© Provided by Fool Coca Cola Coke Ko Soda Beverage Drink Carbonated
Polar Bear Ad Source Coca Cola

Whatever the specifics, one has to worry about how this will play out in

other industries. For example, the Grocery Manufacturers Association

has advocated on behalf of balancing the desire to lower the public’s

consumption of sodium intake in proposed U.S. Food and Drug Administration

(FDA) rules against a need for “providing products that have the safety,

functionality, and taste that consumers expect.” It’s also argued that

genetically modified organisms (GMOs) are safe, but has been against

labeling products indicating there are GMO ingredients, though it does

support national labeling laws.

The Snack Foods Association also supports national GMO labeling laws,

but the better than $374 billion snack-foods industry is often pointed

to as a big contributor to an unhealthy diet. According to 2014 Nielsen

research, snacks are used as meal replacements around half the time,

and that can’t be healthy.

Nielsen also found that, when it comes to candy consumption, families

with young kids are what’s driving sales. Around two-thirds of families

with children 12 and younger are the ones buying sweets, and propping

up the $21 billion candy industry.

Big targets, deeper pockets await

There are endless numbers of avenues of attack against Big Food.

What did the industry know about trans fats (or sodium, partially

hydrogenated fats, added sugar), and when did they know it?

Coca Cola Ko Coke Soda Beverage Drink Carbonated Case Source Flickr Mike Mozart

© Provided by Fool Coca Cola Ko Coke Soda Beverage Drink Carbonated Case

We’ve seen companies sued over the use of the words “natural,” “organic,”

and “evaporated cane juice,” and Whole Foods Market was sued because it

sold almond milk that was mislabeled as being non-GMO certified. When

CVS Health removed cigarettes from its stores a few years ago, it was

criticized for not taking off the shelves the candy, snacks, and ice cream

it also sells — which are also considered health hazards.

Will individual retailers find themselves on the receiving end of endless

lawsuits for not doing all they could to protect consumers from themselves?

This may depend upon the success of the complaint filed against Coke.

But like the tobacco industry before it, the start of a legal assault against

Coca-Cola is merely an expedition to go after more and bigger fish in

the food and beverage industry.

 

 

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John Mackey, CEO of Whole Foods Market, is a member of The Motley Fool’s board

of directors. Rich Duprey has no position in any stocks mentioned. The Motley Fool

owns shares of and recommends Whole Foods Market. The Motley Fool recommends

Coca-Cola and CVS Health. The Motley Fool has a disclosure policy.

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