I know, I know. I said I would never talk about Coke again, or how it relates to its Mexican Coke. But with this recent news item found by Tara, I felt I had to comment about American colas and their related Mexican imports.
First, the article from The Atlanta Journal-Constitution:
PepsiCo says a metro Atlanta company is illegally distributing a Mexican version of its soda in Georgia, according to a lawsuit pending in federal court.
PepsiCo, the beverage and snack foods giant based in Purchase, N.Y., alleges in the lawsuit that Clayton Distributing Co. violated trademark laws, committed fraud and engaged in unfair and deceptive trade practices by distributing Mexican Pepsi in the United States.
Now it is highly likely here that the Clayton Distributing Co. had broken some agreement or contract that they had with Pepsi. So yes, they are doing something wrong.
But there is a bigger picture here that both Pepsi and Coke don’t wish to address, and it relates directly to High Fructose Corn Syrup.
As I filled up my tank with gas this morning at the local convenience store, I went in to make my payment and noted that on the bottom shelf of their beverage cooler a section filled with nothing but bottles of Mexican Coca-Cola. Over the past several months I’ve been seeing more and more locations in Seattle selling these glass bottles of cola.
That’s here in Seattle, a city a mere one hour from the Canadian border. That’s about as far away from the Mexican border one can get on the West Coast without being in Alaska.
Clearly the marketplace is filling a demand for colas that don’t taste like the ones being offered by the likes of Pepsi and Coke through the American distribution channels. Some aspect of the market is turning toward the gray market in order to avoid having to purchase the American colas.
The question that Pepsi and Coke should be asking at this point is “Why?” While there are several differences between the recipes sold here in the States and the ones sold in Mexico, the primary different is that of the sweetening agent, High Fructose Corn Syrup.
At this point, its becoming clear the many consumers are noting the differences between the colas sold in America and those sold in Mexico, and their preference is turning toward the Mexican product. They are rejecting the colas made with HFCS, probably for taste reasons, but health concerns may be a small, albeit misguided, possibility as well.
Clearly neither Coke nor Pepsi want Americans to drink the Mexican versions of the colas, likely due to cost, as well as how sales would be tracked. Gray market sales are notoriously difficult to track, something in which both companies would be eager to do.
But at some point, I’d have to imagine that these companies will have to realize that there is a demand in the States for Colas sweetened with sugar rather than HFCS. But I have no idea if they desire to address that demand. At this point, it would be cheaper to simply litigate the gray market.
Meanwhile, we here in the States will continue to get colas and other soft drinks that, at the very least, taste like one is overdosing on cotton candy.