China Consumer

All about the packaging

Patent error puts Coke at disadvantage to local rival

All about the packaging

Look vaguely familiar?

“Keep perky when you’re feeling murky,” reads the rather jaunty ad for Glacéau Vitamin Water, the brightly coloured ‘vitamin-enhanced’ drink owned by Coca-Cola.

Here’s hoping Vitamin Water exexecutives stay quite as cheerful, as they try to fight off homegrown competition from Nongfu Spring, China’s largest bottled water producer.

That’s because early this year Nongfu released a new line of nutrient-laced drink that seem to bear a striking resemblance to Coca-Cola’s own product.

Zhai Mei, a spokeswoman for Coca-Cola China, told the China Daily that Nongfu’s Victory Vitamin Water is “visually very similar to Coke’s Glacéau Vitamin Water in bottle shape, size and logo design, which would easily confuse consumers.” (And WiC can attest that side-by-side, the two bottles are nearly indistinguishable.)

But Nongfu denies that it copied Coke’s design, pointing to differences with the bottle.

“The designs of the two products are obviously different in both label fonts and colours. We use horizontal words, while they have vertical. Our label is pure white, theirs has two colours,” says Zhou Li, spokesman for Nongfu

When it comes to nutritional value, it is also hard to tell the two apart. Both labels show healthy doses of vitamin C, vitamin B6 and vitamin B12, says NetEase Finance. The only difference is that the Glacéau Vitamin Water contains more taurine, an amino acid commonly found in energy drinks.

What is more glaring is their price difference. Victory Vitamin Water retails for Rmb3.8 ($0.60), while Glacéau Vitamin Water has been selling for Rmb9.8 (although Coke recently lowered the price to Rmb6.9). An employee at Bonjour supermarket in Beijing told the Global Times that Nongfu’s vitamin waters have been selling well, in part because the Glacéau line has the higher price tag.

Nongfu says this is why Coke is now pointing the finger, because it is lagging competitively. According to data supplied by Nongfu, it has six times Coke’s vitamin water share (although the US beverage maker maintains that it only distributes Glacéau in high-end restaurants and retail outlets in Beijing and Shanghai, to protect its premium image).

Might Coke take Nongfu to court for intellectual property infringement? The problem is that Nongfu was able to secure a local patent of the drink’s packaging design (while Coke never applied for one, according to intellectual property lawyer and blogger Stan Abrams).

Even though Glacéau Vitamin Water was on the shelves in China long before Nongfu, Coke has no real legal claim against its homegrown competitor on patent infringement, says 21CN Business Herald. (The situation is similar to one described in WiC100, in which Land Rover has problems using its Chinese name because local firm Geely trademarked it in the country first.)

Meanwhile, Nongfu is demanding an apology, annoyed by Coke’s accusations (for more on Nongfu, and how it dealt with another PR debacle see WiC42).

The company has also stepped up the rhetoric, accusing its competitor of overcharging Chinese consumers by setting the price of its Vitamin Water so high.

“It is Coca-Cola’s own responsibility that it overpriced its product, which resulted in low market share,” says spokesman Zhou. “The drink is being sold for a price deviating from its value, which has damaged the rights of Chinese consumers. Coca-Cola should pay for that.”

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