Coca-Cola Nigeria Cites 15 Legal Grounds Against FCCPC’s N186 Million Penalty

Coca-Cola Nigeria Cites 15 Legal Grounds Against FCCPC’s N186 Million Penalty

Coca-Cola Nigeria Limited (CCNL) has cited 15 reasons why the Competition and Consumer Protection Tribunal should quash the N186,666,666.67 penalty imposed on it by the Federal Competition and Consumer Protection Commission (FCCPC) over its labelling and marketing practices, among other issues.

This is according to its notice of amended appeal against the FCCPC, which was exclusively seen by Newsmen.

Newsmen previously reported that the FCCPC had formally accused Coca-Cola Nigeria Ltd and a sister company of misleading trade descriptions and unfair marketing tactics in their products, Original Taste and Less Sugar.

FCCPC’s Allegations Against Coca-Cola 

In a statement on the commission’s official X handle, the FCCPC noted that Coca-Cola Nigeria Ltd and NBC allegedly deceived the public by describing the variant of its Coca-Cola Original Taste, Less Sugar as the same as its Original Taste variant in terms of formulation.

“Further, Coca-Cola and NBC, after the regulatory intervention, still failed to take appropriate steps to modify their misleading behaviour, demonstrating that the companies acted intentionally by misrepresenting Coca-Cola Original Taste, Less Sugar as Coca-Cola *Original Taste in a deliberate business strategy,” the commission added. 

• The Commission said it found that NBC applied allegedly deceptive trade descriptions to the two variants and supplied these products to consumers, violating Section 116(3) of the FCCPA.
• In its supplementary order, the FCCPC later stated that CCNL must pay a penalty of N186,666,666.67 on or before September 6, 2024, for the alleged contravention of relevant laws.

CCNL’s Grounds of Appeal 

Coca-Cola Nigeria filed its amended appeal against the FCCPC on September 5, 2024.

In its appeal, seen by Nairametrics, CCNL’s legal team, led by Professor Gbolahan Elias SAN, asked the tribunal to set aside the orders of the FCCPC and issue an order restraining the Commission from enforcing any provisions of its Final Order and the Supplementary Order against the appellant.

Here are the reasons listed by Coca-Cola:

1. Fair Hearing 

CCNL alleges that FCCPC erred in law by assuming the roles of the complainant, investigator, prosecutor, and judge in respect of the allegations made against the appellant, thereby breaching the constitutionally guaranteed right to a fair hearing.

1. Lack of Jurisdiction  

Elias maintained that the Commission lacked jurisdiction to make and enforce any final orders against Coca-Cola, and should not have arrogated to itself judicial functions that should be made by the Tribunal.

1. Coca-Cola is NAFDAC Approved

CCNL alleges that the FCCPC accused it of misleading Nigerians, despite the approval of the National Agency for Food and Drug Administration and Control (NAFDAC) for its differentiation of the Original Taste – Less Sugar variant.

  “Complaints have not been made in other foreign markets about the sufficiency of the branding. The labels used in Nigeria, which include ingredient listings at the back, are in accordance with the Appellant’s Visual Identity System, adopted globally and continually updated,” he added. 

1. No Wrong Done by CCNL 

The Appellant submitted that it took several steps to differentiate the Coca-Cola Original Taste product from the Coca-Cola Less Sugar product.

  “When the allegation of the Appellant misleading consumers was made, the Appellant, to the knowledge of the FCCPC, took further steps to differentiate the Coca-Cola Original Taste product from the Coca-Cola Less Sugar product,” he stated. 

1. No False Representation in Coca-Cola Products

CCNL stressed that there is no “false representation” on its part that is “deceptive and reasonably misleading” regarding the nature, content, or taste of any of its products.

1. No Unfair Tactics by Coca-Cola

The appellant further argued that it never used physical force, coercion, undue influence, pressure, harassment, unfair tactics, or any similar conduct against any person in the marketing of the variants or any of the appellant’s products.

 “There are no advertorial materials that portray the Appellant’s products in a manner that was, is, or could be misleading or deceptive, and which the appellant can ‘cease and desist’ from,” he submitted. 

1. CCNL Was Not Allowed to Probe Consumer Complaints

The Appellant argued that it did not know, was never shown, and has never received any consumer complaints about the quality of Coca-Cola Original Taste.

 “The Appellant was not given the opportunity to interact with and ask the alleged consumers questions about their perceptions of quantity and quality. The Appellant was not given the opportunity to know of, read, and consider the alleged complaints from consumers,” it maintained. 

1. FCCPC Erred in Law Regarding CCNL’s Pricing Model 

CCNL contends that FCCPC erred in law when it stated that the pricing model employed by the Appellant was indicative of anti-competitive conduct, such as the abuse of a dominant market position, even though the Respondent had earlier stated that “the available pieces of information regarding the pricing patterns of Coca-Cola Nigeria’s products are, by themselves, insufficient to demonstrate any abuse of market dominance.”

1. Asking CCNL to Tender Written Assurances Is Impossible

CCNL argued that the requirement for Coca-Cola to provide “satisfactory Written Assurances” to the FCCPC regarding refraining from any continuation of violations of its act “is unreasonably indeterminate and uncertain, creating an impossible burden for the Appellant.”

1. FCCPC Abusing Its Powers

CCNL added that the requirement for the appellant to provide its Audited Financial Statement to the FCCPC is impermissible and an abuse of the powers of the Respondent under the Competition and Consumer Protection Act, as no law permits the Commission to directly access such documents.

1. Advertorial Campaign and Compliance  

CCNL argued that the key objective of the investigation by the FCCPC was to achieve adequate differentiation of the Coke variants.

 “Notwithstanding that, there was no misrepresentation in the labelling and packaging of the variants, the Appellants, as a good and cooperative corporate citizen, took further steps to further differentiate the variants,” the senior lawyer stated. 

1. Unauthorized Authorship 

 “The Respondent erred in law when it made the Respondent’s Final Order and the Supplementary Order with all the findings and directives contained therein by its officer (Achimugu A. W. – the Respondent’s AG. Director, Legal Services) who never participated in the investigation conducted by the Respondent, in violation of the Appellant’s right to fair hearing and the provisions of the FCCPA, including Section 160 thereof,” the appeal partly reads. 

1. No Violation of the Law 

 “The Respondent erred in law when it held that the violations of the FCCPA that allegedly ‘commenced in October 2018’ continue still, even though the Appellant had taken sufficient steps to comply with the further requirements of the Respondent and the Appellant was not heard on the sufficiency of those steps before that decision was made,” the appellant stated. 

1. Outrageous Penalty

CCNL told the Tribunal that the penalty sum of N186,666,666.67 awarded against the Appellant is “outrageous, unwarranted, and unjustifiable.”

1. No Binding Obligation Until Appeal Is Determined

CCNL argued that relevant laws recognize that there would not be any sanction from the FCCPC unless and until all of the issues raised in the appeal have been resolved by the Tribunal.

What You Should Know 

• Nairametrics earlier reported that the FCCPC made an undertaking before the Competition and Consumer Protection Tribunal that it will not take any “regulatory or enforcement action” against Coca-Cola Nigeria Ltd pending the determination of its appeal against the Commission’s allegations against the company.
• The Commission had accused Coca-Cola of misleading trade descriptions and unfair marketing tactics in their products, Original Taste and Less Sugar.
• FCCPC lawyer Abimbola Ojenike made the oral undertaking on Wednesday before a three-member panel of the tribunal, led by Thomas Okosu.
• This follows several motions by Coca-Cola Nigeria Limited in appeal number CCPT/APP/5/2024, which urged the tribunal to restrain the FCCPC from taking further regulatory and enforcement action against the appellant pending the determination of its amended appeal.

The tribunal has fixed February 4, 2025, for a hearing on the amended appeal.