Boston, MA 08/28/2014 (wallstreetpr) – The Coca-Cola Company (NYSE:KO) already has enough challenges to deal with, especially the challenge of declining revenue amid red-hot competition in the soft-drink market. However, there may be more challenges for the maker of Coke than it has already known. A new lawsuit has been lodged in federal court in Massachusetts that claims that Coca-Cola is a deceiver in the sense that it misleads customers to boost sales.
Coca-Cola’s once leading brands are facing almost persistent decline in sales in developed markets of the U.S. and Europe. That is happening as consumers change their preferences away from carbonated drinks to natural tastes for health reasons. However, according to the lawsuit filed against the Coke maker in Massachusetts, The Coca-Cola Company (NYSE:KO) seeks reignite sales by appealing to consumers that its products are natural, healthy and devoid of artificial chemicals such as preservatives and flavorings.
Class-action status
The plaintiffs claim such misrepresentation of facts is dangers, and they want the company to be held liable in which case millions or even billions of dollars may be paid to Massachusetts consumers who bought Coca-Cola’s carbonated drinks since August 2010. That is why the lawyers behind the case against Coca-Cola want the court to allow their lawsuit stand as a class-action.
If the plaintiffs get their away against The Coca-Cola Company (NYSE:KO) in the lawsuit, it would be a double-edged sword for Coca-Cola. The company would not only lose money in settlements, but also face serious challenge selling or even promoting its carbonated drinks as healthy products. Presenting Coke, for instance, as a healthy product appeals to consumers who may have questions about such products. As such, a move to portray Coke or Sprite as laden with artificial chemicals would obviously hurt sales.
Falling revenue
The impact that a changing consumer preference has had on The Coca-Cola Company (NYSE:KO)’s financial health can be traced to the most recent quarter. The company generated revenue of $12.57 billion, yet analysts on the average expected revenue of $12.82 billion for the quarter. As if that was not enough, revenue for the most recent quarter was down 1.4% from the previous year.
