Court Authorizes Class-Action Suit Against Too-Expensive Coca Cola

If you thought Coca-Cola was more expensive in Israel than it is elsewhere, you’re not alone: The Central District Civil Court also believes that it may be, and as a result has authorized a class-action lawsuit against the company – declaring it a “monopoly” to boot.

The lawsuit will be heard in the coming months, but on the basis of its acceptance by the court, the two parties to the suit – those suing the company, and the Central Bottling Company of Bnei Brak, the sole distributor of Coca-Cola in Israel – are already discussing a compromise that could see the prices of the soft drink sink, TheMarker reported.

The lawsuit contends that Coca-Cola has cornered the market on 1.5 liter bottles of cola soft drinks in Israel. According to evidence presented by the plaintiffs, Coca-Cola has for many years held some 90 percent of the cola market in Israel. In addition, research shows that the price of the product has consistently been between 45- and 50-percent higher than competing brands – and that when prices of other colas rise, the price of Coke does as well.

The pricing and the increases are clearly not related to the cost of raw materials or production, the plaintiffs claimed – and when asked by the court, the Central Bottling Company was unable to provide any evidence at all that would justify its claims that production costs were responsible for the price differences.

The court also rejected a claim by the company that, as Coca-Cola was a long-established brand with a “worldwide reputation,” the company was required to price it in alignment with prices in other countries.

On the basis of all that, the court said that the case qualifies for class-action status. “Given the price differences between the product and its competitors, which make similar products, and given that the company has not supplied any reasonable explanation for this situation or provided any relevant data that would contradict the claims against it, the plaintiffs have demonstrated that, given the company’s significant power in the marketplace, it appears that there is justification to the claims of unfair pricing,” the court said in its decision. A date for the commencement of the trial has not yet been set.