Anti-Competition: FCCPC indicts Coca-Cola Nigeria, NBC for false information, misleading practices against consumers (Full Report)

*The Federal Competition and Consumer Protection Commission releases details of the report of its recent investigation on alleged sundry regulatory violations by Coca-Cola Nigeria Limited and Nigerian Bottling Company Limited as regards misleading of consumers by falsely claiming that Nigerian ‘consumers are not offered any obvious distinctions between the products in other countries’

Gbenga Kayode | ConsumerConnect

In consonance with its obligation to protect the Nigerian consumers of products and services against unwholesome business practices in the economy, the Federal Competition and Consumer Protection Commission (FCCPC), has issued a full report on alleged regulatory violations of misleading branding and anti-competitive practices by Coca-Cola Nigeria Limited and Nigerian Bottling Company (NBC) Limited.

ConsumerConnect reports the market regulatory Commission stated in the investigative report dated July 29, 2024, that “with respect to the ongoing misleading of consumers, it is no defence that consumers are not offered any obvious distinctions between the products in other countries.”

The FCCPC noted though both Coca-Cola Nigeria Limited and Nigerian Bottling Company (NBC) Limited, during the investigation, had presented “a joint front” as being collectively responsible for developing, branding, marketing and sale of the relevant products, “there are clear lines of responsibility that relate to the violations identified by the Commission during the investigation.”

The market regulator also stressed that the information the FCCPC uncovered “demonstrates that the document submitted to the Commission as the production log for NBC’s Abuja Plant is fraught with omissions that render the document false and grossly misleading.”

It asks regarding Coca-Cola and NBC products in the Nigerian markets: “Can you tell the difference? Do you know they are different products?”

The FCCPC declared in the report that the “original taste is full sugar; less sugar is artificial sweetener. They are different, Coca- Cola doesn’t want you (consumers) to know.”

Rationale for investigation of misleading labelling and branding practices

According to the Commission in the report, in June 2019, it became aware that Coca-Cola Nigeria Limited (Coca-Cola Nigeria) and NBC had produced and introduced Coke Original Taste-Less Sugar (Coke Less Sugar) to the market as a new variant of its Coca-Cola (Coke) drink, “without any publicity, nor prior information to consumers.”

The new variant was bottled in a packaging that was nearly identical to the packaging of the Coke Original.

The FCCPC said it discovered, September 2019, that the Limca lemonlime flavoured drink appeared to have two variants, which are not distinguished. These which products tasted significantly different, have different compositions and nutritional value, were packaged in identical bottles, with identical brand design and the same National Agency for Food and Drug Administration and Control (NAFDAC) registration numbers.

The Commission, therefore, commenced an investigation into the misleading labelling and branding practices of Coca-Cola Nigeria and NBC.

However, during the pendency of the investigation, the Commission disclosed that it received a complaint, January 2021, alleging that Coca-Cola Nigeria offered its products (particularly Coke) at significantly different prices in different locations across the country and that the product quality varies from location to location.

That discovery later prompted the Commission to expand the scope of the investigation, and as a result, the investigation sought to determine the following issues:

Whether the labelling, packaging and branding of Coca-Cola products are misleading or likely to mislead consumers;

Whether the Companies provided misleading and or false information to the Commission, and;

Whether Coca-Cola’s product pricing is indicative of an abuse of market dominance.

During the course of the investigation the Commission requested and received several documentary, visual and audiovisual information from the Companies; conducted a site visit to the NBC Abuja plant on the 2nd of August 2019; and held several meetings with the Companies, including on 11th June 2020, 26th June 2020, 6th February 2023, and 22nd June 2023. Notably, on 21st September 2020, the Commission approved a new packaging design for Coke Less Sugar which was presented by the Companies, as being sufficiently distinguished from the packaging design of Coke Original, in a bid to ensure that consumers were no longer misled.

FCCPC’s findings in the Nigerian markets

The Commission’s findings revealed that:

1. a) “That Companies knowingly and intentionally applied a trade description to the CocaCola Less Sugar variant that could reasonably mislead consumers as to the nature and feel of the drink, in such a manner that consumers would assume that the product was the Coca-Cola Original Taste variant, in violation of Section 116 (1) and (2) of the FCCPA.
2. b) “That NBC, by producing and distributing the two variants of Limca Lime-Lemon flavoured drink in the same packaging and brand design, and using the same NAFDAC registration number for both products, impliedly and falsely communicated to the consumer that both products are the same and thus misled and deceived consumers, in violation of Section 123 (1) (a), (b) and (c) of the FCCPA and Regulation 2 (a) of the National Agency For Food And Drug Administration and Control Act (2004), Prepackaged Food (Labelling) Regulations.
3. c) “That NBC, on at least four occasions, provided false and misleading information to the Commission, in violation of Section 112 of the FCCPA; and That Coca-Cola Nigeria, on at least one occasion, misled the Commission, in violation of Section 112 of the FCCPA.
4. d) “That the available pieces of information regarding the pricing patterns of Coca-Cola products are, by themselves, insufficient to demonstrate any abuse of market dominance, but they however raise some concerns around the pricing in Ebonyi State in 2019.

Though concerning, the astronomical price increases observed in Ebonyi State cannot (by itself) sustain a finding of excessive pricing, as several factors must be considered in determining whether there was excessive pricing.

Therefore, the Commission may conduct further investigations into the issue of whether Coca-Cola Nigeria’s product pricing is indicative of an abuse of market dominance.

Having, therefore, extensively considered all the issues, the Commission concludes this investigation by the issuance of this Report and Order & Notice to the Companies.

Please download and read the full report on Coca-Cola Nigeria and NBC regarding the companies’ misleading labelling, branding and anti-competition practices in the West African country >>HERE.