Tribunal rejects settlement terms between Coca-Cola Nigeria, FCCPC

• Published On: 01 May 2025 at 07:17

The Competition and Consumer Protection Tribunal has rejected Coca-Cola Nigeria Limited's settlement terms and consent order with the Federal Competition and Consumer Protection Commission.

This decision comes after the FCCPC reversed a N186 million fine levied on CCNL for employing false trade descriptions.

The decision was issued on April 30, 2025, by a three-member panel of the Competition and Consumer Protection Tribunal led by Thomas Okosu.

Coca-Cola Nigeria Limited appealed the Federal Competition and Consumer Protection Commission's N186 million fine for labelling and marketing practices, among other issues in Nigeria.

The FCCPC previously charged Coca-Cola Nigeria Ltd and its sibling firm of employing false trade descriptors and unfair marketing methods for their products "Original Taste" and "Less Sugar."

The FCCPC determined that CCNL used allegedly deceptive trade descriptions on two product variants, in violation of Section 116(3) of the Federal Competition and Consumer Protection Act.

In a supplementary ruling, the Commission ordered CCNL to pay a penalty of N186,666,666.67 on or before September 6, 2024, for suspected violations of applicable legislation.

At Wednesday's resumed judgement, CCNL's attorney, G. Abubakar, informed the tribunal that following the March 18, 2025 hearing, both the appellant and the respondent (FCCPC) maintained settlement discussions.

He apologised for bringing the subject to the tribunal at that point of the proceedings.

"I must sincerely apologise to the tribunal for the trouble of writing the judgement," he informed them.

He stated that the FCCPC had issued a consent order on April 24, 2025, under Section 149 of the Federal Competition and Consumer Protection Act (FCCPA) 2018.

"Both the appellant and the respondent (FCCPC) also filed terms of settlement dated April 24, 2025," he noted, noting that the notices were submitted to the tribunal on April 29, 2025.

While adopting the notices, CCNL's counsel asserted that the development was in accordance with the FCCPA and other applicable legal provisions.

Ojenike, the FCCPC's lawyer, acknowledged receipt of the settlement terms and consent order notice dated April 29, 2025, from CCNL's legal representation.

"We have also confirmed the execution of the consent order in a communication from the FCCPC's Director of Legal Services, A.W. Achimugu," she said.

He stated that the communication mirrored the FCCPC's goal for the development.

In his decision, Justice Thomas Okosu stated that the conditions of the settlement between the FCCPC and CCNL did not meet the standards of a legitimate and legally binding application.

"The notice of settlement contains arguments irrelevant to the instant case," he said, noting that they referenced a related matter.

He agreed that, while regulatory settlements are encouraged, they must serve the public interest and not jeopardise the regulator's statutory obligations.

He further stated that the settlement appeared to be an attempt to "arrest" the tribunal's decision, particularly in light of its previous finding against the Nigerian Bottling Company Limited, the Coca-Cola bottling franchise holder.

"These terms of settlement are not supported by law nor are they in the public interest," the tribunal stated, calling the situation "troubling."

The judge highlighted that Coca-Cola had been penalised for misbehaviour, yet the business reached a settlement with the FCCPC on a "no-fault basis."

He also questioned why the FCCPC substituted the N186 million penalty with a N198 million payment to the Commission, without explaining the change.

"The stubbornness in the filings by the parties is grave," the judge noted, rejecting the parameters of settlement proposed by the FCCPC and CCNL.

In its decision, the tribunal determined that the FCCPC had constitutionally enforced its findings and the N186 million order on CCNL.

Okosu also concluded that CCNL received a fair hearing during the FCCPC's five-year investigation, which included many meetings with the corporation, contrary to the appellant's arguments.

He concurred with the FCCPC's claim that Coca-Cola misled Nigerian consumers with false trade descriptors, despite the fact that the products were NAFDAC-approved.

The panel subsequently dismissed CCNL's appeal for lack of merit, ordering the business to pay the N186 million penalty within 60 days.