PepsiCo Sues Coca-Cola For False Claims In New Powerade Ads

PepsiCo Seeks Monetary Damages From Coca-Cola

PepsiCo yesterday filed a lawsuit in U.S. District Court in New York against Coca-Cola, claiming that it is "making false claims in advertisements" for its new Powerade Ion-4 drink, according to Joe Guy Collier of the ATLANTA CONSTITUTION. PepsiCo filed the suit through Stokley-Van Camp, a subsidiary that owns its Gatorade brand. The Powerade ads feature Gatorade and Powerade Ion-4 bottles with the text, "Don't settle for an incomplete sports drink ... Introducing the complete sports drink with Ion-4." The ads claim that Ion-4 is "superior to Gatorade because Ion-4 has additional electrolytes." However, PepsiCo in the suit contends there is "no evidence, scientific or otherwise, that Powerade Ion-4 functions better than Gatorade as a sports drink." Coca-Cola spokesperson Scott Williamson said, "We stand behind our product and are prepared to defend the role that Powerade plays in hydrating consumers." Gatorade last year accounted for 77% of U.S. take-home sales in the sports drink segment, while Powerade represented 22% (ATLANTA CONSTITUTION, 4/14). The suit, in addition to seeking unspecified monetary damages, aims to block Coca-Cola from claiming that Powerade "will improve performance better than Gatorade will and from claiming that Gatorade is 'incomplete.'" PepsiCo also "seeks an order forcing Coca-Cola to recall" Powerade Ion-4 products with "deceptive labels" (BLOOMBERG NEWS, 4/13). Gatorade also "takes issue with the creative," from Ammirati, N.Y., "calling its depictions of Gatorade bottles 'mutilated' and 'distorted'" (ADAGE,com, 4/13).

THE WAR CONTINUES: CNBC’s Darren Rovell writes for 40 years, the "folks at Gatorade relied on telling the general public that their drink was the best because of the science behind it,” and “the strategy worked.” However, Powerade recently “has won the marketing war.” Rovell: “Gatorade might think it is taking the high road by suing Powerade, but I have to say that’s not the right tact.” Winning legal cases “doesn’t affect the court of public opinion much” (CNBC.com, 4/14). The WALL STREET JOURNAL's Valerie Bauerlein notes PepsiCo and Coca-Cola "have routinely challenged each other in court." PepsiCo in '06 sued Coca-Cola over TV ads for its Powerade Option, and the case was settled out of court. In '07, a judge dismissed Coca-Cola's suit charging Pepsi with "patent infringement on a collapsible bag that dispenses syrup for fountain sodas" (WALL STREET JOURNAL, 4/14).