Does a Coca-Cola drink have enough juice?

At the heart of a case before the Supreme Court today is a juicy question: Can a drink with only minimal amounts of an ingredient tout itself for including that product?

The case pits one beverage giant -- Coca-Cola Co. (KO) -- against a smaller, albeit growing, drink company, POM Wonderful, which is known for its line of pomegranate-based products, from juices to supplements.

The lawsuit, POM Wonderful vs. the Coca- Cola Company, stems from 2008, when POM took issue with a drink sold by Coke's Minute Maid unit that was touted as a "Pomegranate-Blueberry" juice. The problem? POM pointed out the drink only included 0.3 percent of pomegranate juice, which it claimed violated the Lanham Act, which prohibits false and misleading statements about a product.

The case before the Supreme Court, however, is more complicated than whether the drink's low juice content bars Coca-Cola for marketing the product as a pomegranate juice. The case is posing the question of whether one company (in this case, POM) can sue another (Coca-Cola) for a misleading label that nevertheless is allowed by the Food and Drug Administration.

"Depending on how the Supreme Court rules, the ramifications could be broad. This is a huge case for the food and beverage industry," Linda Goldstein, a partner with Manatt, Phelps and Phillips, told Adweek. "No one has asserted that Coca-Cola violated FDA rules and law. The issue is whether the FDA regulations are the floor or the ceiling. Pom says it's the floor and that the label can still be misleading."

If POM wins the case, then more food labeling could be open to lawsuits, Adweek notes.

In an emailed statement to CBS MoneyWatch, Coca-Cola said it's committed to labeling its products "in accordance with all applicable FDA regulations." It added that it is "confident that our labeling fully complies with those regulations."

For its part, POM said in an emailed statement that it believes the issue "should be a straightforward false advertising case; no one disputes POM's claim falls within the clear terms of the Lanham Act. Coca-Cola sold a so-called 'Pomegranate-Blueberry Juice' that - unknown to consumers - has only trivial amounts of either of those juices."

POM expects a ruling this summer.

Ironically, POM has itself been accused of misleading advertising. The Federal Trade Commission last year ruled that ads such as "Cheat death" made misleading claims about its drinks.

  • Aimee Picchi

Comments

Market Data

Market News

Stock Watchlist