BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Wednesday, 19 June, 2002, 14:02 GMT 15:02 UK
Drinks firms revive syrup row
A woman chooses between Pepsi and Coca Cola
The court decision was a sour one for syrup suppliers
The US appeals court has given permission to Coca-Cola and PepsiCo to revive a price-fixing case against three firms who make an important raw material for soft drinks.

The dispute between the two beverage giants and their suppliers centres on a sweetener called high fructose corn syrup (HFCS), which is also widely used in baked goods and candy bars.

Coca-Cola and PepsiCo are suing the two biggest US producers of the bulk-manufactured sweetener, Cargill and Archer Daniels Midland (ADM) as well as AE Staley, a US-based unit of Britain's Tate & Lyle.

Lawyers for the soft drinks makers and other firms in the class action lawsuit said they would pursue a damages payout totalling $4.2bn (2.8bn).


We do not think there are any facts to support going to trial in this case

Bonnie Raquet, Cargill

They had originally asked for $1.4bn in damages but would now ask for this to be trebled on appeal, said their lawyer Robert Kaplan.

Legal battle

The soft drinks makers successfully appealed against a US District Court decision last summer to throw out their case.

The appeals court sent the case back to the lower court, saying there were grounds for a fresh hearing of the complex issues.

"The evidence is not conclusive by any means - there are alternative interpretations of every bit of it - but it is highly suggestive of an explicit, though of course covert, agreement to fix prices," the appeals court said.

As well as Coca-Cola and PepsiCo, the class action suit involves about two dozen other firms who use the sweetener in food products.

'No facts'

A spokeswoman for Cargill said the firm "respectively disagree(s)" with the appeal court's decision.

"We do not think there are any facts to support going to trial in this case," said Bonnie Raquet, a spokeswoman for Minnesota-based milling giant Cargill.

ADM spokeswoman Karla Miller declined to comment, the Bloomberg news agency reported.

Nor was there anyone available to comment at AE Staley in Decatur, Illinois, according to Reuters.

Sour relations

For an apparently unexciting bulk commodity, the market for HFCS has been riven with conflicts.

This particular lawsuit was first filed in 1995.

Separately, the big American HFCS producers built extra capacity in the 1990s in anticipation of a big market in Mexico when it joined the North American Free Trade Area.

Mexicans consume more bottles of cola per person than any other country.

But Mexico raised tariffs on HFCS imports from America to protect its sugar producers. The duties were found to be anti-competitive by the World Trade Organisation in 2000.

Relations between the US producers and the soft drinks firms soured when it became clear that the HFCS producers didn't initially have the expected demand to justify the investment they had made in new capacity.

Some HFCS producers were also aggrieved by the prices for bulk contracts agreed by soft drinks firms.

As to PepsiCo and Coca-Cola, they have often been at each others throats in the battle to sign high profile commercial sponsorship deals.

See also:

28 Mar 02 | Business
09 Mar 02 | England
16 Nov 01 | Business
29 Jan 02 | Business
01 Oct 01 | Business
10 Oct 01 | Business
05 Feb 01 | Business
21 Jul 98 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes