Coca-Cola sued for misleading consumers over soda dangers
Non-profit group the Praxis Project has filed a lawsuit against Coca-Cola and the American Beverage Association (ABA) accusing them of deliberately misleading consumers about the health effects of soda. The complaint claims Coco-Cola and ABA's actions are as bad as the tobacco giants and that the soda is as dangerous to health as cigarettes, it references the tobacco cases settled in the US in 1998. The suit also charges that Coke targets children with its advertising. If the lawsuit is successful, implications could be far-reaching, not only for Coca-Cola but the soda and food and beverage industries.
Put down that soda! According to a lawsuit filed against Coca-Cola (NYSE: KO), the carbonated drink is just as dangerous to your health as a cigarette. Well, maybe not quite, but the soda giant and the American Beverage Association (ABA) are being sued by consumer activists who say their actions are just as bad as what the tobacco giants did, and they should be similarly punished.

Image source: Flickr via Kim Stromstad.

While the implications for Coca-Cola and the rest of the soda industry are obviously huge should the lawsuit be successful, that risk would actually multiply exponentially because of what it would mean for the rest of the food and beverage industry. Triumphant trial lawyers likely would not just stop at soda, but would also attack other beverages they deemed unhealthy -- energy drinks, anyone? -- as well as processed food manufacturers, candy, ice cream, and snack makers.

A smoking gun?

The complaint filed by the nonprofit organization Praxis Project accuses Coke and the ABA of deliberately misleading consumers over the health effects of soda. It charges that they colluded to confuse people about the science linking sugary drinks with obesity, type 2 diabetes, and cardiovascular disease. It says they chose to deflect attention from soda being the cause of such illnesses onto a lack of exercise as the likely cause, and maintained a fake news campaign that consumers could "balance" their intake of soda as part of an overall dietary regime of health.

The tactics are similar to how lawyers went after the tobacco companies. In the 1950s, tobacco companies routinely defended themselves against claims that cigarettes caused cancer by denying there was a link, or by suggesting other factors caused cancer. In the 1980s, the tobacco companies argued smokers knowingly assumed the risks of cancer, or other health problems, when they began smoking, but it wasn't until a third phase of lawsuits filed against tobacco companies when it emerged the the tobacco companies had actually been aware of the addictive nature of tobacco.

In 1998, the attorneys general of 46 states settled with four of the largest tobacco companies under a Master Settlement Agreement that remains in effect today, and through which tens of billions of dollars have been paid out.

Image source: Flickr via Claudio Toledo.

The Coca-Cola lawsuit even references those tobacco cases, and charges the soda giant's response to the health claims was one of "cultivating relationships" with scientists to "balance the debate," just like the tobacco industry did when it formed the Tobacco Industry Research Committee to counter the science linking smoking to cancer.

Think of the children

The suit also claims that Coke targets kids with its advertising -- just like the cigarette companies -- as a way "to replenish the ranks of its customers, and it tries to recruit them young." Similar to tobacco's Joe Camel, which was said to be a subtle call to lure children into smoking, the suit points to Coke's animated polar bear advertising through a link to a website put up by the Center for Science in the Public Interest called The Real Bears, which warns of the dangers of soda consumption by playing off the polar bears.

Image source: Coca-Cola.

Whatever the specifics, one has to worry about how this will play out in other industries. For example, the Grocery Manufacturers Association has advocated on behalf of balancing the desire to lower thepublic's consumption of sodiumintake in proposed U.S. Food and Drug Administration (FDA) rules against a need for "providing products that have the safety, functionality, and taste that consumers expect." It's also argued that genetically modified organisms (GMOs) are safe, but has been against labeling products indicating there are GMO ingredients, though it does support national labeling laws.

The Snack Foods Association also supports national GMO labeling laws, but the better than $374 billion snack-foods industry is often pointed to as a big contributor to an unhealthy diet.According to 2014 Nielsen research, snacks are used as meal replacements around half the time, and that can't be healthy.

Nielsen also found that, when it comes to candy consumption, families with young kids are what's driving sales. Around two-thirds of families with children 12 and younger are the ones buying sweets, and propping up the $21 billion candy industry.

Big targets, deeper pockets await

There are endless numbers of avenues of attack against Big Food. What did the industry know about trans fats (or sodium, partially hydrogenated fats, added sugar), and when did they know it?

Image source: Flickr via Mike Mozart.

We've seen companies sued over the use of the words "natural," "organic," and "evaporated cane juice," and Whole Foods Marketwas sued because it sold almond milk that was mislabeled as being non-GMO certified.When CVS Healthremoved cigarettes from its stores a few years ago, it was criticized for not taking off the shelves the candy, snacks, and ice cream it also sells -- which are also considered health hazards.

Will individual retailers find themselves on the receiving end of endless lawsuits for not doing all they could to protect consumers from themselves? This may depend upon the success of the complaint filed against Coke. But like the tobacco industry before it, the start of a legal assault against Coca-Cola is merely an expedition to go after more and bigger fish in the food and beverage industry.

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John Mackey, CEO of Whole Foods Market, is a member of The Motley Fools board of directors. Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Whole Foods Market. The Motley Fool recommends Coca-Cola and CVS Health. The Motley Fool has a disclosure policy.