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20.09.2024 Featured DOUBLE DECEIT: After It Was Found Guilty of Deceptive Trade Practices, Coca-Cola Repeats 3-Year-Old Promise of $1bn Investment in Nigeria

Published 20th Sep, 2024

By Sodeeq Atanda

Coca-Cola Nigeria Limited has repeated its previous promise of investing $1 billion in Nigeria barely two months after the Federal Competition and Consumer Protection Commission (FCCPC) found it guilty of multiple unfair and deceptive trade practices.

On July 29, the FCCPC published its investigation into the business practices of the company as well as the Nigerian Bottling Company and found that the two companies had been deliberately mislabelling some of their products.

However, in an X post on Thursday, the federal government disclosed that the management of the bottling company made the pledge that it would stretch the investment over a five-year period.

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But this appeared as a repeat of the exact promise the company made to the government in 2021 during the Muhammadu Buhari administration.

FIRST PROMISE OF 2021

On November 23, 2021, former vice-president Yemi Osinbajo stated that Coca-Cola had promised to inject $1 billion into its Nigerian business for expansion and more opportunities.

Laolu Akande, then Osinbajo’s spokesperson, quoted his principal in a statement retrieved from the State House website as saying, “Your ongoing investment in the country, which I am told will be in the order of $1 billion in the next five years, testifies to your faith in the possibilities of Nigeria.

“And you can rely on the partnership of the Nigerian government, (and I dare say the Nigerian people too) as you make these great strides. And we will continue to work with businesses across the broad spectrum of our dynamic economy to ensure that we do this with a clear view of the opportunities and problems of the day.

“Young people who have found successful careers in sports and entertainment inspired by your support; consumers from Lagos to Kano, Rivers to Plateau, linked by distributors in every region of the country, who have built enduring businesses getting Coca-Cola into the hands of millions; a robust value chain that includes service providers and marketing agencies, creators of the iconic Coke adverts that have formed part of our individual and collective memories all these years.”

SAME PROMISE AGAIN

Like the first promise, the announcement of the second promise came from the presidency. About three years after the first, the company remade the promise to be executed over the same number of years.

Some top executives of the company met with President Bola Tinubu at the State House on Thursday. The X post made after the meeting strongly appeared to be the outcome of their meeting.

“NEWS UPDATE: President Bola Tinubu welcomes $1 billion investment from Coca-Cola,” the post read. “President Bola Tinubu has secured another major win for Nigeria’s economy.”

“During a meeting with global and local Coca-Cola executives at the presidential villa today, Coca-Cola System announced that it will invest $1 billion over the next five years, creating more jobs and growth opportunities. President Bola Tinubu reiterated Nigeria under his administration, will remain business friendly, and is open for business.”

Bayo Onanuga, Tinubu’s special adviser on information and strategy, wrote on X on Thursday that the company could not fulfil the first pledge because of the challenging business climate then.

“Yes, the company made a similar promise three years ago. But it couldn’t fulfil it because of the challenging business environment prevailing in Nigeria then,” he said.

FCCPC INVESTIGATION

In violation of the Federal Competition and Consumer Protection Act, Coca-Cola had deceitfully engaged in unfair tactics and misleading trade descriptions, making its customers unable to distinguish between products of different contents.

The FCCPC commenced the investigation in 2019 and made its findings public in July.

Part of the report read, “By December 2020, the Commission was convinced based on the evidence, that Coca-Cola and NBC on multiple occasions, and counts violated, and remained in violation of the FCCPA, particularly with respect to transparency, and clear disclosure obligations to their product patrons, intentional communications in describing their Coca-Cola ‘Original Taste, Less Sugar’ variant as one and the same, as well as unchanged, when in actual fact, same had indeed changed, was different, differently formulated and not the same as their otherwise ‘classic’, or ‘Original Taste’. One of the parties also attempted to, or misled the Commission under Section 112 of the FCCPA.”

The commission’s findings include: “a) That companies knowingly and intentionally applied a trade description to the Coca-Cola 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.

“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), Pre-packaged Food (Labelling) Regulations.

“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 CocaCola Nigeria, on at least one occasion, misled the Commission, in violation of Section 112 of the FCCPA.”

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In its conclusion, the FCCPC disclosed that it engaged Coca-Cola and NBC with a view to providing sufficient remedies after it concluded the open investigation. However, Coca-Cola, despite this prolonged investigation and multiple opportunities to comply with the law, failed to pursue those remedies.

“Despite multiple and repeated further engagements with Coca-Cola, NBC and their respective retained legal practitioners, the current market status and consumer feedback clearly demonstrates the colossal ineffectiveness of the milder and weak differentiations Coca-Cola and NBC have adopted,” the FCCPC said.

“Their internal documents show that they are aware of the evidence of the feedback that their efforts remain ineffectual. Coca-Cola and NBC have however made more spirited efforts at other interventions to address the regulatory concerns than measures to ensure compliance, and discharge from the regulatory process.”

It remains unclear whether the company will make good on its investment promise this time around.

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Published 20th Sep, 2024

By Sodeeq Atanda

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