Nestle and The Coca-Cola Co have agreed to pay US$650,000 in damages and relabel their Enviga green tea drink, following a complaint against the functional beverage by 26 state attourneys general.

The two firms, which launched Enviga in the US under their Beverage Partners Worldwide venture, drew complaints from the attourneys general and consumer groups after claiming that the green tea drink can "burn calories".

In a settlement announced yesterday (26 February), the firms agreed to pay a combined $650,000 to a coalition of attourneys general from 26 states. Connecticut, which lead the complaint against Enviga via AG Richard Blumenthal, will get $100,000.

Coca-Cola and Nestle have also agreed to relabel Enviga, to include a disclaimer stating that weight loss is only possible through diet and exercise.

Blumenthal said: "Enviga's calorie-burning claims led to credibility loss more than weightloss. Its new labels must now state clearly that calorie burning and weight loss requires proper diet and exercise."

It is the second time in less than three months that Blumenthal has led a coalition of attourneys general to force a drinks company to back down over the marketing of a product.

In December, MillerCoors, the JV between SABMiller and Molson Coors in the US, said that it would remove a range of 'energy' ingredients, including caffeine, from its alcoholic Sparks drink. It also agreed to pay out $550,000 in damages and cease promotion and production of caffeinated alcoholic beverages.