On Thursday, the Federal Competition and Consumer Protection Commission (FCCPC) released a comprehensive report of allegations of deceptive labelling and branding practices against Coca-Cola Nigeria Limited.
According to the report, the investigation, which began in June 2019, uncovered significant issues with Coca-Cola Nigeria and its partner, Nigerian Bottling Company (NBC), relating to misleading product packaging and inconsistent pricing strategies that misled consumers.
The investigation began when the FCCPC alleged that Coca-Cola Nigeria had introduced a new variant of its popular Coca-Cola drink, “Coke Original Taste – Less Sugar,” without adequately informing consumers or differentiating it from the original Coca-Cola.
Coca-cola
The commission said the new variant was packaged almost identically to the original, creating confusion among consumers.
He said his investigation also revealed problems with the lemon and lime flavoured drink Limca, which appeared in two different formulations but with indistinguishable packaging, further aggravating the consumer deception.
The FCCPC also verified allegations of fluctuations in product prices across different regions in Nigeria, raising concerns about possible abuse of market dominance.
The findings, published in late May 2023, painted a detailed picture of the companies' alleged attempts to evade regulatory scrutiny and deceive consumers and the commission.
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Branding and labelling
The FCCPC investigation focused on four products manufactured by the companies in relation to two flavours: Coca-Cola Original and Coca-Cola Less Sugar and Limca lemon-lime flavour (2 kcal) and Limca lemon-lime flavour (53 kcal).
The commission said Coca-Cola Nigeria had introduced Coca-Cola with less sugar and packaging almost identical to the original Coca-Cola, creating potential for confusion among consumers.
Furthermore, Limca, another NBC product, was found to have two distinct variants (one with lemon-lime flavour and the other with a slightly different flavour), both sold in identical bottles with the same brand design and National Agency for Food and Drug Administration and Control (NAFDAC) registration numbers. It claimed that the lack of differentiation led consumers to believe that both products were identical.
National Agency for Food and Drug Control (NAFDAC)
In September 2019, the FCCPC claimed to have identified these deceptive labeling practices and began examining the branding strategies of Coca-Cola Nigeria and NBC.
The commission's report noted that these practices violated several sections of the Federal Competition and Consumer Protection Act (FCCPA) and NAFDAC regulations, which require clear and accurate information about products.
Investigation
The FCCPC said the investigation involved an exhaustive review of documentary, visual and audiovisual evidence.
The Commission said it conducted visits to the NBC plant and held multiple meetings with company representatives.
In August 2019, the commission said it had visited NBC’s Abuja plant to assess the situation first-hand. Subsequent meetings, held in June 2020, February 2023 and June 2023, provided further insight into the companies’ practices and responses.
On September 21, 2020, the FCCPC approved a new packaging design for Coca-Cola with less sugar to distinguish it from the original Coca-Cola. Despite this approval, Coca-Cola Nigeria failed to implement the changes and discontinued the original PET variant of Coca-Cola, offering it only in can form. This move was seen as an attempt to circumvent regulatory requirements and perpetuate consumer confusion.
In February 2023, the report noted that Coca-Cola Nigeria was reintroducing Original Coca-Cola in PET bottles using designs previously rejected by the FCCPC.
The commission said it discovered that these designs were used for production before receiving official approval, demonstrating a deliberate disregard for regulatory directives.
Throughout the investigation, the FCCPC alleged that it found that Coca-Cola Nigeria and NBC provided misleading or false information to the commission, adding that despite the commission's directives, the companies continued to use deceptive packaging for their products.
The FCCPC said the reintroduction of Original Coca-Cola with the problematic designs after being given explicit instructions otherwise was viewed as a blatant attempt to deceive the commission and undermine regulatory oversight.
“NBC further misled the Commission when, at the February 6, 2023 meeting, NBC falsely informed the Commission that it had not applied the proposed trademark designs to any of its products already on the market before submitting them to the Commission for approval.
“That Coca-Cola Nigeria, on at least one occasion, misled the Commission, in violation of Section 112 of the FCCPA, when at the February 6, 2023 meeting, it falsely informed the Commission that the proposed design it submitted to the Commission for approval was not already in use on products circulating in the marketplace,” it stated.
Market dominance
The FCCPC also investigated Coca-Cola Nigeria's pricing practices, which varied significantly across regions. While the commission said it found some evidence of irregular pricing patterns, particularly in Ebonyi State, the data was insufficient to conclusively demonstrate an abuse of market dominance.
The commission acknowledged that there are multiple factors that influence pricing and indicated that further investigation may be necessary to fully assess whether Coca-Cola Nigeria's pricing strategies constituted excessive pricing.
The FCCPC report found that Coca-Cola Nigeria and NBC had engaged in practices that violated consumer protection laws.
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The companies were found to have misled consumers through misleading branding and labeling, failed to implement approved packaging changes and provided false information to the commission, it said.
The FCCPC said that while there were concerns about pricing practices, more evidence was needed to determine whether there was an abuse of market dominance.