Buenos Aires, Aug. 13 - The Argentine unit of French food and drink maker Groupe Danone said Monday it was satisfied with a ruling an Argentine judge made on a criminal complaint by Coca-Cola Co.'s Argentine unit.
Coca-Cola filed a complaint last month against two executives of Danone Argentina's water unit and an executive of Danone's advertising agency, Euro RSCG, seeking as much as $10,000 in damages per individual.
Coke alleged that its French rival made false statements against its Dasani water brand in an Internet smear campaign, calling it "bottled tap water" and "cancer water."
Danone's Argentina water unit said Monday in a statement, "The judge has dismissed Coca-Cola's claim due to the inexistence of unfair trade practices, as alleged in the accusation."
Coca-Cola Argentina said Friday that an Argentine judge acknowledged Coke's claim that some executives of Danone and Euro RSCG in Buenos Aires had orchestrated a smear campaign against Dasani. However, the judge rejected the U.S. company's claim that the campaign caused damage to the brand's sales, because when the campaign started, Dasani was a new brand and it didn't yet have any consumers to lose to Danone.
Coca-Cola Argentina said it appealed the ruling, saying its complaint included substantial evidence that it lost customers because of the false information spread via email. Coke said, "If not reversed, the ruling might create a dangerous precedent by establishing that market entrants aren't protected from defamatory smear campaigns."
Dasani is the No. 2 water brand in terms of sales in the U.S. after PepsiCo Inc.'s (PEP) Aquafina. Poland Spring, a unit of Swiss giant Nestle SA (NSRGY) is the third.
The brand is also sold in Canada, Japan and South Korea, Africa and Latin America.
Dasani was launched in Argentina in October 2005. Immediately following the launch, its competitor started the email campaign that extended beyond Argentina to a number of other Latin American markets, Coke said.
Coke said as a result of Danone's campaign, Dasani sales in Argentina are half of what Coke's market research had projected.
Coke has a 6% share of Argentina's water market, including flavored waters, while Danone has a 57.3% market share.