US juice maker Pom Wonderful, can sue Coca-Cola for labelling one of its drinks Pomegranate Blueberry, despite only containing just traces of those juices, the US Supreme Court has ruled.
Pom Wonderful, which sells 100 percent pomegranate juice, claims it suffered a loss in sales as a result of Coke’s labelling, SBS News reports.
The juice company complained that the drink made by Coke was made almost entirely – about 99.5 percent – from a mixture of apple and grape juice, a fact that consumers would not easily be able to discern from reading the label.
The front label of the Coca-Cola beverage, beneath the words proclaiming "pomegranate blueberry," also has the words "flavoured blend of five juices" in smaller type.
Coca-Cola had won a lower court case in San Francisco court with a ruling that the company's labelling practices were consistent with US Food and Drug Administration rules.
But the Supreme Court reversed, finding that the juice label may technically comply with FDA rules but may still mislead consumers for different reasons, Business Day reports.
Justice Anthony Kennedy, said the law governing regulation of food and drug labels does not preclude a competitor from suing under a different law – the Lanham Act – for unfair competition based on false or misleading claims. He said federal food and trademark laws complement each other in the regulation of misleading labels.
In a statement, Pom's parent company Roll Global said the decision "will translate into higher assurance for consumers that the labels on beverage and food are accurate".
Coke released a statement saying it is "committed to clear labeling that fully complies with FDA regulations".
The company said it would defend against Pom's lawsuit and show "that our product was not the cause of Pom's poor sales".