Is Coke's Secret Ingredient Fungicide?

For decades, Coca-Cola KO has clung onto the secret ingredient like dog with a rope toy, maintaining that it is this which keeps it ahead of competitors like Pepsi PEP. One has to assume, however, that the secret ingredient is a very specific combination of sugars, caramel and perhaps a few chemicals. An unapproved fungicide is likely not part of the deal. Let's be fair to Coke here though. When the company itself found the fungicide in orange juice made by KO as well as its competitors, it wasted no time alerting federal regulators that some Brazilian growers must be spraying their trees with the substance. All joking aside, that is a sharp, smart and ultimately commendable move from the soft drink behemoth. According to the Wall Street Journal, Coke will not say which of its brands the fungicide had been discovered in, but it makes both Simply Orange and Minute Maid. The FDA confirmed on Monday that an unnamed company had detected low levels of the substance in finished products, some of which are on store shelves. The agency had previously said that is was testing all different brands of juice for the potentially harmful product, though it is entirely possible that KO would have come forward anyway. The Environment Protection Agency said that drinking juice with these low levels of the fungicide does not raises safety concerns. All of which leads to the question, if it is not harmful why is it unapproved? Surely there are some safety concerns. If not, then how many other unapproved substances are there out there that I can consume? Curious minds want to know. KO and PEP , which makes Tropicana and Dole, together hold a two-thirds share of the U.S. orange juice market. Shipments of orange juice are being stopped at ports now, while tests for the fungicide are being done. One has to imagine that the danger will be wiped out before it becomes, well, dangerous. In the meantime, juices thought to contain a high amount of Brazilian juice are being monitored careful. We suggest freshly squeezed juice for the time being.
ACTION ITEMS:

Bullish:
Traders who believe that Coca-Cola will see out this mini fire might want to consider the following trades:
  • Yeah, KO will put this out with minimum effort. After all, they made all the right noises after discovering the substance.
  • Pepsi won't suffer either.
Bearish:
Traders who believe that this could spell trouble may consider alternative positions:
  • Any juice company outside of Brazil might be worth a look. Suddenly, Florida looks awesome.
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