San Francisco filed a civil complaint on December 2 2025 against Kraft Heinz, Mondelez, Coca‑Cola, Kellogg, Post, General Milks, PepsiCo, Nestlé USA, Mars Inc., and Conagra Brands, alleging that the companies use marketing tactics similar to those employed by the tobacco industry to promote ultra‑processed foods that contribute to obesity, cancer and diabetes.
The complaint cites violations of California’s Unfair Competition Law and the public nuisance statute, and it defines ultra‑processed foods as products that contain high levels of added sugars, fats, salt and artificial additives, consistent with the NOVA classification system used in the lawsuit. The city argues that these foods are marketed aggressively to low‑income and minority communities, creating a public health burden that the city must address through restitution and injunctive relief.
The lawsuit draws explicit parallels to tobacco marketing, pointing to tactics such as targeting vulnerable populations, using deceptive advertising, and lobbying against regulation. The complaint notes that the food companies have historically acquired or partnered with former tobacco firms, transferring marketing expertise that has been used to promote high‑calorie, low‑nutrient products.
Kraft Heinz’s Q3 2025 earnings showed a $0.24 EPS beat driven by strict cost controls that offset a 4% revenue decline to $2.89 billion, while the company lowered its full‑year guidance due to weaker demand in legacy categories. Mondelez reported an EPS beat of $0.05 on a revenue miss of $0.10 billion, citing margin compression from cocoa‑price inflation and softer European demand. Coca‑Cola posted a 3.5% revenue beat and an EPS beat of $0.02, supported by strong pricing power in its core beverage segment and a 2% increase in global sales volume.
The lawsuit poses significant legal and reputational risks for the defendants. A court order to halt deceptive marketing could force a costly overhaul of advertising strategies and product reformulation, while the city’s restitution demand could reach hundreds of millions of dollars. The case also sets a precedent that may prompt other municipalities to pursue similar actions, potentially reshaping the regulatory landscape for the ultra‑processed food industry.
California has already enacted laws targeting ultra‑processed foods, such as AB1264, which will ban such items from school lunches by 2035. The industry’s response has been defensive, with the Consumer Brands Association arguing that the definition of ultra‑processed foods is not scientifically agreed upon. The lawsuit underscores the growing pressure on food manufacturers to align marketing practices with public health objectives and to demonstrate transparency in product labeling.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.