The leader in the BigBev category, Coca-Cola, was right up there with God and Country. The best gift anyone could think of was to give the world a Coca-Cola.
That was then.
Now, just as BigTobacco had been, Coca-Cola is being sued for being a health hazard. Non-profit Praxis Project has filed a lawsuit against both Coca-Cola and the American Beverage Association (ABA). Allegedly, they are responsible for maladies ranging from obesity to Diabetes.
Here is the coverage in BusinessInsider of the Motley Fool analysis of this development. Motley Fool assesses the value of equities. Yes, investors should beware.
All BigBev should be shaking in its boots. And along with that category is BigFood.
The trial lawyers created the bulletproof template for extracting lots of money from a major industry which in the courts of law and courts of public opinion was positioned and packaged as dangerous to health. Their home run was the Master Tobacco Settlement. The strategy worked because the trial lawyers promoted that the industry was targeting children. And that supplied the tipping point.
The template was applied to asbestos, then lead paint. The former was successful. We still don't know if the lead paint manufacturers such as Sherwin-Williams will be brought to their knees legally, in terms of funds they will have to pony up and brand damage. What we do know is the Sherwin-Williams is still making and shipping lead paint overseas. It has been banned in the U.S. since the end of the 1970s.
Sure, BigBev has been moving toward selling drinks which pass the wellness test. But their legacy brands remain everywhere. People may be consuming less Coca-Cola. But they still are consuming plenty.
The trial lawyers are as skilled in public affairs as they are in legalities. Investors will have to factor in the litigation risk with BigBev.
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