The Coca-Cola Co. has successfully appealed against a court ruling in Argentina that said a campaign by Danone had not affected sales of Coca-Cola's Dasani water brand in the country.

Reports yesterday (11 December) said that Coca-Cola de Argentina has won its appeal against the France-based company, meaning the legal case will continue its course to a final ruling.

The row between Coca-Cola and Danone blew up in July, when Coca-Cola de Argentina filed a complaint against Aguas Danone de Argentina and an executive at Danone's advertising agency, Euro RSCG. Coca-Cola alleged at the time that the companies had "orchestrated and executed a widely circulated, two-year Internet smear campaign that included the dissemination of false statements against the Dasani water brand.

"This Internet propaganda campaign was designed to discredit the Dasani brand and hamper its entry into the market, and clearly warrants the extraordinary step of filing a criminal complaint," Coca-Cola de Argentina added.

In August, however, a judge of first instance said that, the campaign, which he conceded had been orchestrated by Danone and RSCG, could not have caused any damage to Dasani's sales, because Coca-Cola did not have any Dasani consumers to lose to Danone at the time, it being new to the market.

The Argentine Appeal Court reversed the August decision this week. Coca-Cola de Argentina told Dow Jones yesterday that the court had stated: "It is possible to assume that those responsible for this campaign had forecast that some of the potential buyers of the product (Dasani), due to the malicious information spread via Internet, would chose similar (water) products, a market's sector dominated by the accused company (Danone)."