The Real Thing

There’s a delightful trademark law story in today’s Wall Street Journal. Some pockets of the United States are awash in imported “Mexican Coke” — Coca-Cola produced legally in Mexico. The reason is this: “Mexican Coke” is still produced with cane sugar, rather than the corn syrup now used in the U.S. There’s nostalgia at work among Mexican immigrants to the U.S., but the cane sugar-based product tastes different, too. A snippet from the WSJ:

Mexican-made Coke is such a popular taste of home for many immigrants that Las Tarascas sells about 20 cases a week, or nearly 500 12-ounce bottles at $1.25 apiece. “It’s what they grew up with,” says Mr. Carvallo. Meanwhile, he sells fewer than five cases a week of the cheaper U.S. version, in cans and plastic bottles on a nearby shelf after his Mexican supply is gone. (A plastic 20-ounce bottle of U.S. Coke sells in some parts of the country for about $1.)

Coke from south of the border is a big business, fueled by the Hispanic population, the fastest growing minority group in the U.S., and soda connoisseurs drawn to its taste and the old-time look of the iconic bottle. Fans insist the Mexican cola, made with cane sugar, has a better “mouth feel” than the U.S. formula. U.S. bottlers switched from cane sugar to high-fructose corn syrup in the 1980s to cut costs.

Coke claims that importing “Mexican Coke” violates U.S. trademark law, and it may be right. But here’s where the case gets fun.

So-called “grey market” imports of this sort — goods produced lawfully outside the U.S. then imported to the U.S., where they compete with goods produced here — can be imported legally so long as they are “genuine,” that is, “the real thing.” In principle, U.S. consumers are getting authentic goods, whether those goods are produced in the U.S. or elsewhere, because the imported goods and the locally-produced goods are “the same thing.” If the imported Coke is the same thing as U.S.-produced Coke, then importation is legal; Coke loses. If the imported Coke is not the same thing, then importation violates trademark law. There’s the rub: Coke’s branding relies on the myth — well-known to be false – that the soda is the same everywhere. On the one hand, there is one and only one true Coke, and both the brand and trademark law generally assume as much. On the other hand, when you’re in the U.S., according to Coke, only U.S. Coke is true Coke. As the WSJ points out:

Coke has no plans to start making a version of Mexican Coke in the U.S., claiming consumers wouldn’t consider it authentic. Introducing another Coke formulation also would undermine the myth that the famous soda is identical everywhere, even though the recipe varies slightly around the world. In Europe, Coke is made using sugar from beets.

I don’t mean to make too much of the metaphysics, and I don’t doubt that all of this can be reconciled within the normal bounds of the law. For a company that wants to teach the world to sing, however, this tiff is an entertaining reminder that three-part (and even two-part) harmony can be a lot tougher than it sounds. If “real” American Coke is neither chemically nor culturally identical to “real” Mexican Coke, then someone is hitting a false note.

Christine Hurt at Conglomerate blogs on this from a hypothetical marketer’s point of view.

UPDATE: Grant McCracken analyses the branding narrative behind “real” Coke.