The Coca-Cola Company (KO)’s Labeling Lesson in Vitaminwater Lawsuit

Even if a food or beverage maker properly lists all the ingredients its product contains, it can still be accused of misleading consumers. That’s what The Coca-Cola Company (NYSE:KO) found out a few years ago after a court rejected its attempt to have a lawsuit against its Vitaminwater brand dismissed over its labeling.

The Center for Science in the Public Interest said because the label contained phrases like “vitamins + water = all you need,” consumers could be fooled into thinking that’s all the beverage contained, despite the label properly listing all the ingredients, with which federal judge John Gleeson concurred.

The fact that the actual sugar content of Vitaminwater was accurately stated in a Food and Drug Administration-mandated label on the product does not eliminate the possibility that reasonable consumers may be misled.

So this isn’t a case like that of The WhiteWave Foods Co (NYSE:WWAV) , which tried to snooker consumers by calling the sugar in its milk the creatively contrived name “evaporated cane juice.” Rather, this is a company saying sugar’s sugar and telling consumers how much the drink contains — as the FDA requires it to do — but it is still facing financial loss regardless.

Reading is fundamental
We all remember our moms admonishing us to take our vitamins to make sure we grew up healthy and strong, and though the real value of vitamins remains somewhat in dispute in a world of fortified foods, some people have been apparently rendered incapable of discerning marketing slogans from ingredients.

The case is moving forward and The Coca-Cola Company (NYSE:KO) believes it will ultimately prevail, particularly after another judge ruled the CSPI can only seek declaratory and injunctive relief for the labeling issues and not damages. Injunctive relief prevents Coke from making certain claims for the product, such as because its Power-C flavor, for example, is infused with zinc and Vitamin C, it wouldn’t be able to claim Vitaminwater helps “power your immune system” as it currently does. Needless to say, the CPSI also thinks it will win when The Coca-Cola Company (NYSE:KO) has to testify under oath about its ingredients.

Like a waistline spreading from eating too many sweets, the labeling lawsuit trend keeps growing. Dr Pepper Snapple Group Inc. (NYSE:DPS) is being sued because the plaintiff thought the antioxidants in its 7-Up berry-flavored drinks actually came from juice instead of the added vitamin E because the label showed pictures of fruit. Energy drink maker Red Bull is being sued because it charges a premium for its caffeinated beverage that “gives you wings” even though it allegedly provides the same jolt as a lower-priced cup of coffee.