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Coke And Pepsi Cans Are Getting Pulled Off The Shelves In the UAE

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Coca-Cola (KO) and Pepsi (PEP) cans are getting pulled off the shelves in the UAE after being accused of "fraud" by the nation's consumer protection watchdog, reports Shehab Al Makahleh at Gulf News.

The brands reduced the size of their 355ml cans down to 300ml, while keeping the price the same "without permission," says Hashim Al Nuaimi, director of the consumer protection division at the Ministry of Economy, according to Arabian Business.

“What the two companies did is unacceptable fraud and cheating," he says, "since they reduce the can size and maintained its price, they simply increased its price in violation of the consumer protection laws.”

It looks like Coke and Pepsi tried what's called a "stealth price rise," which is legal in many countries. In the US and UK, big consumer packaged-goods companies like P&G (PG) and Kraft (KFT) will often employ this practice.

But the UAE government sees it differently.

And that's a very important part of doing business abroad. Laws are profoundly different everywhere you go, and sometimes, even the biggest, most well-funded brands like Coke and Pepsi don't do their due diligence.

Or they just think they can get away with it.

POSITION:  No positions in stocks mentioned.