Sainsbury gives in to Coke: Retailer will change design of its own-brand cola cans after 'amicable discussions'

COCA-COLA yesterday triumphed in the brand wars raging between manufacturers and retailers when it persuaded J Sainsbury to change the design of its own-brand 'Classic' cola to make it look less like Coke.

Sainsbury said yesterday that its decision followed amicable discussions with Coca-Cola, both before and after the new version of its own- label cola was launched. 'It is not that they threatened legal action - if they had we would have resisted. It was done to make both parties happy and to carry on the goodwill between us.'

Coca-Cola said it had carried out research that showed customers were confused about which was Coke and which was Sainsbury's Classic. 'The new version is a signifcant improvement which has addressed our main concerns. We are very pleased to have been able to achieve this result from discussions,' a Coca-Cola spokesman said. Sainsbury is changing the typeface and removing underlining from part of the logo on the can.

The spokesman would not comment on whether the company would have been prepared to take legal action, or to refuse to supply Sainsbury with Coke.

Sainsbury's climbdown comes despite research showing that it has achieved a significant market share in the three weeks since the Classic cola was launched. AGB Research estimates that it has taken 15 per cent of the market, compared with between 2.5 and 3 per cent for the product's own-label predecessor. Coke's share of cola sales through Sainsbury fell from 63 per cent to 33 per cent over the same period, while those for its main rival, Pepsi, dropped from 18 to 6 per cent.

The Coca-Cola spokesman would not comment on the figures but said: 'Clearly Sainsbury has complete control over the shopping environment in their own stores. I am confident that Coke will now be restored to a place on the shelves commensurate with its status as a brand.'

Many other producers have claimed that retailers' brand packaging is so similar to their own that it is virtually indistinguishable, but this is the first significant victory for the manufacturers in this area.

Several leading branded goods manufacturers - including Unilever, Allied-Lyons, Kellogs and Mars - are attempting to persuade the Government to tackle the problem of copycat brands in a review of trade mark legislation currently going though Parliament. Some are believed to have threatened to withdraw investment in Britain if their pleas are ignored, while Unilever made its dissatisfaction plain at last week's annual meeting.

Their representaive organisation, the British Producers and Brand Owners Group, welcomed Sainsbury's climbdown on cola, but said: 'We expect Sainsbury will apply the same course of action to other products in their stores which carry the same shape, colour and distinctive features as manufacturers' own brands.'

Sainsbury said, however, it had no intention of changing other product lines although it is always prepared to discuss complaints with its suppliers. 'We have launched thousands of own-label products, but have only had a handful of approaches over the years,' the spokesman said.

Coca-Cola's victory is likely to reflect its power as the world's leading brand, which makes it virtually essential that Sainsbury carries Coke on its shelves.

Other manufacturers, with less muscle, will find it harder to persuade retailers to change their designs - particularly as many of them also supply own-label products.

Brand manufacturers want a clause inserted in the trade mark bill to make unfair competition illegal. A spokesman for the group said that British trade mark legislation is already behind that in many other countries, as it does not prevent copying.

While manufacturers can take legal action on passing off, that is difficult and expensive and, in the case of supermarkets, risks damaging relationships with customers.

View From City Road, page 29

(Photograph omitted)