A questionable brand strategy
In response to the UK Governments announcement it plans to increase tax on high sugar content soft drinks, Coke has announced plans to sue. As the soft drink market continues to decline globally Coke has been doing a good job of swimming against the tide, increasing profits through smart marketing campaigns, tapping into the consumer small portion trend by introducing smaller product serves, and increasing margins. But as they announce plans to fight the ‘sugar levy tax’ in the UK I’m left wondering if this is a smart rearguard action, or a case of burying their head in the sand.
Few new taxes have been met with the kind of public support that the sugar tax announcement received. Backed by a long term and very public campaign by Jamie Oliver and a range of other high profile personalities, the ‘sugar tax’ has strong public support and reflects a trend that has seen similar taxes already introduced in Mexico, France and Chile, with India and Indonesia also considering a similar levy. With such a strong groundswell of consumer support, is a public legal battle really the best approach for Coke?
We’ll watch with interest to see whether Coke engages in a slug-fest Vs the UK Govt and public opinion potentially harmful to their brand reputation, or steps back to reconsider a way forward more aligned to consumers.