A court in Argentina has dismissed allegations against Danone that it had engaged in unfair trade practices in the country against rival Coca-Cola.
The court ruled in favour of the France-based group on Friday over claims that it had defamed Coca-Cola's Dasani brand of bottled water as "cancer water". Coca-Cola claimed that Danone was behind the claims made on internet blogs.
Accusations that the company had engaged in a bout of high profile name-calling over a rival's product highlight the increasing competitiveness between rivals in global bottled water production.
The decision could therefore have considerable ramifications for the future of how companies advertise and treat their rivals in the press, particularly in the use of on-line resources.
In a statement, Danone's Argentinean subsidiary said that it now felt exonerated over any wrongdoing regarding the case.
"The court analysed the accusation of unfair practices, while it has made no pronouncement at all about the existence of a defamation campaign," the company stated. "Aguas Danone de Argentina is satisfied with the court's decision to dismiss this lawsuit in which the reputation of the company has been exposed, its people accused and its business code questioned, while it confirms the compliance with said policy."
The findings will be especially important for Danone, due to the strength of its presence in the country, where it is both the leading dairy and beverage processor.
In the fresh dairy market alone, the groups La Serenissima brand holds a 65 per cent share of the market, the company said. Due to this presence, Danone said it expected to undergo double figure organic sales growth for its beverage and dairy brands in the coming year.
Coca-Cola's Argentinian bottler, said it would continue to appeal against the decision though, in a statement e-mailed to the Dow Jones Newswire service following the ruling.
"It is important to note that the decision did not find that the propaganda campaign did not happen, nor did the lower court in any way vindicate the individuals who are alleged to be responsible for the conduct," the group said, as quoted by the Financial Times.
In the original filing made last month, two Danone executives were accused of spreading a rumour on the internet that Dasani, launched in Argentina in 2005, is "cancer water" and comes from a tap, according to the Financial Times.
These ideas then made their way on to blogs across the internet community, with sales being hit accordingly, Coca-Cola alleged.