Labelling lawsuits underscore vigilance toward product packaging

The food & beverage landscape may undergo significant changes shortly if a lawsuit between POM Wonderful & Coca-Cola is decided in POM’s favour.

POM is suing Coca-Cola for misleading packaging for its Minute Maid Pomegranate Blueberry juice. The labelling suggests that the beverage is a 100% fruit juice flavoured with a combination of five fruit juices. The beverage contents are primarily apple and grape juice, containing only 0.3% blueberry juice, 0.2%. pomegranate juice, and 0.1% raspberry juice.

The crux is whether one organization can sue another for misleading labelling that was deemed permissible by the Food & Drug Administration. The FDA has decided that the beverage contents and the name itself satisfies their labelling requirements. That said, the governing body allows companies to name the product based on the flavour even if trace amounts were used to produce the flavour. Volume quantification is not necessary for the product contents. Linda Goldstein, a partner with Manatt, Phelps and Phillips prefaced the following to AdWeek (full article here):

“Depending on how the Supreme Court rules, the ramifications could be broad. This is a huge case for the food and beverage industry. 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.”

Should this case be decided favoring Coca-Cola, the food & beverage industry’s product labelling practice is kept intact. POM will have made an even larger name for itself and Coca-Cola will carry on business as usual. In the end, this could serve as a win for both Coca-Cola and POM Wonderful despite the court ruling in Coca-Cola’s favour and everyone paying exorbitant legal fees (the case has been around since 2008).

If the court ruled in POM’s favour, this sets the stage for increased vigilance toward product package labels. Beyond the direct impact where Minute Maid must augment the product label, other food & beverage products currently on the market will be availability for scrutiny. According to Goldstein in the AdWeek article, the fact that it could lead to a class action litigation suggests that many products do not satisfy the labeling requirements. The precedent would be set that an organization can reduce the competitor’s advantage by scrutinizing their packaging claims. Will this ultimately lead more companies to sue other companies for the sake of labelling challenges?

The genesis of POM’s lawsuit was Coca-Cola’s introduction of this Minute Maid Pomegranate Juice at a lower price point relative to POM’s products. Given Coca-Cola’s distribution and marketing muscle, it’s understandable that POM would want to level the playing field as much as possible. However, be careful what you wish for. POM is also currently in appeals with the Federal Trade Commission over their own misleading advertising claims (full article here). Through all of this, both beverage organizations’ focus has been on reducing the competition’s advantage. Let’s hope that they return to their core business functions sooner rather than later: selling refreshing beverages.