VENEZUELA: COCA-COLA ZERO BANNED

C O N F I D E N T I A L CARACAS 000731

SIPDIS

E.O. 12958: DECL: 06/11/2019
TAGS: ECON ETRD PREL EINV PGOV VE
SUBJECT: VENEZUELA: COCA-COLA ZERO BANNED

Classified By: Economic Counselor Darnall Steuart for reasons
1.4 (b) and (d).


1. (C) Summary: On June 10, Mexican-owned Coca-Cola Femsa
was notified by the Venezuelan government of an
administrative review corroborating the ingredients of
Coca-Cola Zero. Femsa voluntarily complied and has
temporarily pulled Coca-Cola Zero from the Venezuelan market.
Despite what Femsa thought was a gentleman's agreement "to
handle the matter in a low-profile manner," the Venezuelan
Minister of Health and Social Protection announced to the
press a ban on the sale of Coca-Cola Zero, alleging that it
contains ingredients harmful for human consumption.
Coca-Cola Femsa is complying with the mandated testing of the
product, but the company is worried about damage to the brand
due to the aggressive action taken against it by the
Venezuelan government. End Summary.

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Venezuelan Government Takes on Coca-Cola Zero
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2. (SBU) On June 10, Venezuelan Minister of Health and Social
Protection Jesus Mantilla announced to the local press that
the government had ordered Coca-Cola Femsa to withdraw
Coca-Cola Zero from the Venezuelan market. Mantilla alleged,
without specifying, that ingredients contained in Coca-Cola
Zero are harmful for human consumption. Mantilla also stated
that the Ministry of Health and Social Protection (MOH) had
undertaken an inspection of Coca-Cola Femsa in Venezuela.


3. (C) On June 11, EconOff spoke with Rosy Alvarez, Manager
of Public Relations and Communications for U.S.-owned
Coca-Cola Services in Venezuela (please protect throughout.)
Alvarez said that Coca-Cola Femsa had been visited on June 10
by a MOH Sanitary Inspector, who opened an administrative
proceeding against the company. Alvarez said the MOH
privately alleges that Coca-Cola Zero contains sodium
cyclamate. Alvarez stated Coca-Cola Femsa's three positions
in response to the allegations: Coca-Cola Zero contains no
harmful ingredients; it does not contain sodium cyclamate;
and Coca-Cola Femsa will comply with Venezuelan law and work
closely with the MOH to resolve this issue. She added that
Coca-Cola Femsa viewed this proceeding as a technical
process.


4. (C) Coca-Cola Femsa, according to Alvarez, had reached a
gentleman's agreement with the MOH inspection team, by which
Coca-Cola Femsa would submit to various sanitary and
ingredients tests as well as a low-profile handling of the
matter. Alvarez and her team were surprised by Mantilla's
public announcement of the action, which came approximately
fifteen minutes after Coca-Cola Femsa and MOH officials had
reached this agreement. The aggressive and very public
manner in which Mantilla is handling this matter, according
to Alvarez, may cause great damage to the Coca-Cola Zero
brand.

CAULFIELD