Coca-Cola to Remove Harmful Ingredient from Drinks - Analyst Blog


Per media reports, TheCoca-Cola Company ( KO ) has agreed to do away with brominated vegetable oil (BVO) in its citrus-flavored products. The decision follows after some of the drinks of the company were severely criticized by food activists on social media and online forums.

BVO acts as an emulsifier in soft drinks to evenly distribute the flavor. In the absence of the ingredient, the flavoring will likely float on the surface.

However, bromine is used in the production of fire retardants, water sanitizer and insecticides. As per England's public health department, consuming food that has been fumigated with bromine may result in burns to the mouth, throat and stomach followed by severe stomach irritation. Prolonged exposure may result in bromine accumulation in the body and brain damage in severe cases, resulting in coma.

Based on some preliminary studies in the mid-1970s, the Food and Drug Administration passed an interim ruling in 1977 stating that BVO was safe up to 15 parts per million. Also, BVO was omitted from the list of substances "generally recognized as safe" back in 1970. Bromine usage in food products is banned by European Union and Japan since 2009.

Coca Cola will, reportedly, discontinue the usage of BVO in its drinks by the end of fiscal 2014. Though the company did not provide any list of products, per media reports, the ingredient will be removed from Fresca and some varieties of Fanta also.

Last year, Coca-Cola's rival PepsiCo Inc. ( PEP ) had also removed BVO from its Gatorade sports drink in response to customer complaints.

Coca Cola currently carries a Zacks Rank #3 (Hold). Other stocks in the beverage sector worth considering include Dr Pepper Snapple Group, Inc. ( DPS ) and Coca-Cola Enterprises Inc. ( CCE ). Both the stockscarry a Zacks Rank #2 (Buy).

COCA-COLA ENTRP (CCE): Free Stock Analysis Report

DR PEPPER SNAPL (DPS): Free Stock Analysis Report

COCA COLA CO (KO): Free Stock Analysis Report

PEPSICO INC (PEP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CCE , DPS , KO , PEP

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