Tuesday, PepsiCo's (PEP) unit Stokely-Van Camp, Inc. and The Coca-Cola Company (KO) announced reaching an agreement to end the litigation initiated by Stokely-Van Camp over Coke's Powerade Ion4's advertising campaign.
Stokely-Van Camp sought to block Coca-Cola from running "deceptive" advertisements claiming that Powerade Ion4 was superior to its Gatorade and filed a suit with the U.S. Southern District Court of New York in April 2009.
Powerade is a sports drink manufactured by the Coca-Cola Company, whose main competitor is
Gatorade, a brand of flavored non-carbonated sports drink, manufactured by Stokely-Van Camp.
According to reports, Coca-Cola claimed Powerade contains calcium and magnesium which Gatorade does not; by running print and billboard advertisements showing a Gatorade bottle and a tagline saying the drink is "incomplete" and missing ingredients i.e. electrolytes found in Powerade.
PepsiCo retaliated by stating that "more calcium and magnesium are found in most tap water than in Powerade." PepsiCo also sought an order forcing Coca-Cola to recall Powerade Ion4 products with deceptive labels and unspecified monetary damages.
In a joint statement, the two companies said, "We are pleased to put an end to the litigation so now we can focus our energies on the marketplace."
PEP is currently trading at $61.16, up $0.18 or 0.30%, on a volume of 4 million shares on the NYSE, while KO is at $59.08, up $0.04 or 0.07%, on a volume of 3.10 million on the NYSE.
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