Coca-Cola Sued for Alleged Deceptive Marketing

January 5, 2017, 6:14 PM UTC
Coca Cola soft drink self serving vending machine
TORONTO, ONTARIO, CANADA - 2016/10/27: Coca Cola soft drink self serving vending machine. (Photo by Roberto Machado Noa/LightRocket via Getty Images)
Photo by Roberto Machado Noa—LightRocket via Getty Images

Coca-Cola and beverage industry advocate American Beverage Association have been sued over alleged false and misleading marketing of sugar-sweetened beverages, a lawsuit that places blame on the industry for health woes including diabetes and obesity.

The lawsuit, filed in a California district court by the non-profit group Praxis Project, alleges Coca-Cola (KO) “deceives consumers about their health impact.” Praxis Project further alleged American Beverage Association, a trade group that Coke and other beverage companies fund, assists in the effort to purportedly mislead the public about the health implications of soda, which some studies have linked to type 2 diabetes and obesity.

Both Coca-Cola and the ABA refute the allegations. Coke, in an e-mailed statement, called the lawsuit “legally and factually meritless. We take our consumers and their health very seriously and have been on a journey to become a more credible and helpful partner in helping consumers manage their sugar consumption.” Coke went on to tout the company’s efforts to offer more low- or no-calorie products. Since 2014, for example, Coke has launched more than 100 new low- or no-calorie drinks.

The ABA in a separate statement said that American beverage companies “know we have an important role to play in addressing our nation’s health challenges. That’s why we’re engaging with health groups and community organizations to drive a reduction in the sugar and calories Americans get from beverages.”

There’s been some criticism on how Coke and others have “engaged” with health groups. Coke came under fire in 2015 when the New York Times reported that the company funded scientists that promoted more exercise and less attention to cutting calories as a way to maintain a healthy weight. A recent paper published by the American Journal of Preventative Medicine found that Coke and rival PepsiCo (PEP) have recently sponsored close to 100 national health organizations while also lobbying against public health bills that were intended to reduce how many sugary sodas people consume.

Coke doesn’t agree with those criticisms. The company says it is “transparently disclosing our funding of health and well-being scientific research and partnerships” and claims it will “continue to listen and learn from the public health community and remain committed to playing a meaningful role in the fight against obesity.”

Interestingly, the lawsuit doesn’t name PepsiCo or Dr Pepper Snapple (DPS) as defendants. A representative involved in the case told Fortune that’s because the investigation isn’t yet complete. “It appears that the complaint names the leading proponents of deceptive marketing,” according to Maia Kats, who represents the Center for Science in the Public Interest, a nonprofit that advocates for healthier foods.

Of course, the soda industry has long found itself the subject of allegations that their beverages aren’t just unhealthy—but also causing consumers harm. That unhealthy perception has led to weakening sales—the soda industry’s sales have declined for 11 consecutive years in the U.S., as consumers drink more water, flavored waters and juices that are deemed healthier. The industry is also facing tax levies that target soda brands in major cities like Philadelphia and San Francisco, which are being implemented in a bid to dissuade consumption in the name of public health.

The Praxis Project lawsuit, which is calling for a jury trial, aims to prove Coke violated the Fair Advertising Law in its marketing and wants the defendants to fund a “corrective public education campaign to reduce the consumption of sugar-sweetened beverages.” It also calls for the defendants to prominently post on their websites the “consumption of sugar-sweetened beverages can lead to obesity, diabetes and cardiovascular disease”—a request that echoes the public health warnings that tobacco makers have been forced to add to their packaging for many years.

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