24 Apr 2009

Myth busting: Things go better with Coke

by Madeleine Kearney

ACCC accepts court-enforceable orders from Coca-Cola. Overall impression of Myth Busting advertising campaign thought to be misleading and deceptive.

Coca-Cola South Pacific Pty Ltd gave section 87B undertakings to the ACCC on 2 April 2009 in response to concerns about advertising during October 2008 entitled, "Kerry Armstrong on Motherhood & Myth-Busting". The advertisement sought to correct consumers' perceptions about specific "myths" that Coke makes you fat, rots your teeth and is packed with caffeine.Under section 87B of the Trade Practices Act, the ACCC can accept an undertaking from a company which has breached the Trade Practices Act, instead of prosecuting the company. In what many would regard as a good result for the company, Coca-Cola South Pacific has given undertakings to publish advertisements in the national press with the heading "Coca-Cola setting the record straight".

Coke says: "The feedback we received from the Australian Competition and Consumer Commission and others is that the overall impression we created by those ads may have been misleading. What we meant to convey is that there can be a place for Coca-Cola in a balanced, sensible diet and active lifestyle. We certainly did not intend our messages to be misleading or to convey an impression that Coca-Cola cannot contribute to weight or to cavities and other dental problems. We have listened to the feedback we received and want to set the record straight."

Coca-Cola South Pacific has promised that for a period of three years, it will not make claims that:

  • consumption of Coca-Cola cannot contribute to weight gain unless that claim can be substantiated
  • consumption of Coca-Cola cannot contribute to tooth decay or that tooth decay is declining globally, unless the particular claim made can be substantiated; and
  • 250ml of the Coca-Cola Product bearing the brand name "Diet Coca-Cola" contains only one half of the amount of caffeine as that contained in a cup of tea, without further qualification, unless that claim can be substantiated.

One of the undertakings required by the ACCC is that the company will implement a compliance program in order to prevent future breaches of the Trade Practices Act. In this case, Coca-Cola South Pacific is to retain a law firm or professional with trade practices expertise to undertake a review of its procedures regarding advertising and promotional material and report within six months to the ACCC in respect of the implementation of any recommendations.

What is the message in Coke's experience for other companies? The final paragraph of the corrective advertisement summarises it nicely:

"This process has reinforced in our minds that even where advertising messages are well-intentioned, it is important to consider the overall impression that the messages may convey."

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.