A false advertising lawsuit being reviewed by the U.S. Supreme Court may impact on how fruit juices are marketed to consumers.
Depending on the eventual ruling, the case could spur demand for niche juices like those made from blueberries and pomegranates, according to an agricultural economist.
“People will pay more for quality and, I think, more for transparency,” said Eric Thor, an agribusiness professor at Arizona State University who has studied the juice industry.
The lawsuit was filed by Pom Wonderful, a large California pomegranate grower and juice producer, against the Coca-Cola Co.
Pom Wonderful accused the beverage giant of false advertising for prominently labeling a Minute Maid product with the words “Pomegranate” and “Blueberry” when it contained less than 1 percent of those juices.
“What’s misleading consumers here is they have no way on God’s green earth of telling that the total amount of blueberry and pomegranate juice in this product can be dispensed with a single eyedropper,” said Seth Waxman, attorney for Pom, during recent oral arguments before the Supreme Court.
The competing Minute Maid product mostly contains less expensive apple and grape juices but the deceptive labeling causes Pom to lose sales, the company claims.
In 2012, a federal appeals court dismissed Pom’s lawsuit, finding that its false advertising claims were precluded by the U.S. Food and Drug Administration’s labeling regulations.
The Coca-Cola Co. has asked the nation’s highest court to uphold this dismissal, arguing that FDA’s rules are meant to ensure consistency in labeling across the country.
Otherwise, fruit juice labeling decisions will be driven by court rulings, possibly subject to different interpretations of false advertising from state to state, said Kathleen Sullivan, an attorney for Coca-Cola.
“Just to be clear, what Congress wanted was national uniformity so that a manufacturer could print one label and sell it in the 50 states and not have its juice legal when you leave on the flight in California and illegal when you land in D.C.,” she said.
Thor of Arizona State University said he hopes the ruling will bring more “transparency” to the juice market.
Currently, companies can use names and pictures to imply that a beverage is bursting with fruit when it actually contains little or no juice, he said.
“Juice is not well defined from a commercial perspective,” Thor said.
For consumers to know what they’re actually getting, they need to read the nutritional label that’s usually located on the back of a product, he said.
However, many consumers are swayed by the product name, Thor said. “Right now, we don’t have any clarification of names versus labels.”
These distinctions are important in the market place, where shopping decisions are often based on price, he said. “Pomegranate juice is considerably more expensive than apple juice.”
The American Beverage Association, however, argues that fruit juice labeling standards must be flexible due to constantly fluctuating prices.
“As a result, beverage manufacturers often adjust the proportions of ingredients in their products in response to changes in cost or availability,” the group said in a court document.