SAO PAULO -- Colgate-Palmolive Co. isn't following anything that remotely resembles a textbook branding exercise in Brazil. One of the world's most sophisticated packaged-goods marketers is taking a leading toothpaste brand, killing it for four years and in the interim launching a new toothpaste under an entirely new name. Needless to say, Colgate-Palmolive is being coerced into taking these bizarre measures.
The story starts in 1995 when Colgate bought the worldwide Kolynos oral care business. In September 1996, the Brazilian anti-trust authorities (CADE) approved the acquisition in Brazil subject to conditions designed to prevent Colgate from dominating the local market. Together, the two companies would controlled 78% of the market.
Earlier this year Colgate announced that it had decided to select CADE's proposal that it 1MDSD1option to 1MDNM1suspend the sale of the 80-year-old Kolynos brand toothpaste in Brazil for four years and market another brand in the same consumer segment.
Last week Colgate announced that it's spending $20m to advertise the launch of the new toothpaste brand Sorriso (which means smile). The Sorriso ads feature actors who starred in Kolynos commercials in the 1960s.
But the controversy is not over yet. Now rival Gessy Lever is claiming that Sorriso is exactly the same product as Kolynos toothpaste and doesn't follow the spirit of CADE's guidelines.
During the next four years, Colgate can continue to promote the Kolynos brand in other areas of the Brazilian oral care market through the sale of Kolynos branded toothbrushes, dental floss, and dental rinses. The agreement with CADE has no effect in the 12 other countries where these products are currently being sold.
Copyright June 1997, Crain Communications Inc.