Your commercial news round-up: riots, Coca-Cola dispute, PRIME energy drinks, TikTok Shop

Reading time: four minutes

As the UK continues to grapple with the impact of the violent riots that have taken place across the country over the past week, sparked by misinformation shared online, the National Emergencies Trust shares useful information on how you can donate to those affected. Amid this unrest, financial scandals and legal battles surface – from Coca-Cola’s multi-billion-dollar tax dispute to PRIME Hydration’s alleged contract breach. Meanwhile, find out about P.Louise’s record-breaking TikTok Shop success story and the reason retailers are turning to the app to sell.

• It’s been a heartbreaking week as violent riots up and down the country took place, with many targeting mosques and hotels housing asylum seekers. The attacks were fuelled by misinformation online following the murders of three young girls at a Taylor Swift-themed dance class in Southport on 29 July. Bebe King, Elsie Dot Stancombe and Alice da Silva Aguiar were killed, with eight more children and two adults injured. Following the attack, social media posts falsely speculated that the suspect was an asylum seeker, resulting in unrest that started in Southport and spread to other cities, including Manchester, Sunderland, London and Belfast. As of 7 August, Over 400 arrests have been made in connection with the unrest, with 140 already charged. Chief Constable BJ Harrington, the National Police Chiefs’ Council lead for Public Order has issued a warning to those causing violence – “if you have played a role, you can expect a knock at the door”, he said. Speaking to the communities impacted by the violence, Harrington added: “We are doing all we can to end the violence and bring those responsible to justice. Additional officers have been stood up to respond and remain in their communities for extra reassurance and support.”
  
  Further riots were anticipated to take place on 7 August with police prepared to respond to the violence; however, thousands of anti-racism demonstrators gathered across England instead. On 8 August, dawn raids have been launched in London to arrest suspected rioters and measures are being taken in anticipation of further potential unrest this weekend.
   
• Coca-Cola is facing a potential $16 billion bill in back taxes following a decade-long dispute with the US tax authorities. The company has been accused of hiding significant profits in low-tax countries, such as Ireland, to avoid paying taxes in the US. The dispute has reached a critical point, with an initial payment of $6 billion in cash due soon to cover unpaid taxes and interest for the years 2007 and 2009, as well as the potential $10 billion it could owe for the years 2009 to 2024. However, as long as Coca-Cola and its auditor, EY, believe there’s a better than 50% chance of winning on appeal, the payments won’t impact the company's earnings. That said, if the company loses its appeal, the damage will be enough to wipe out a year and half of profits and it could face a higher US tax bill in the future. The outcome of this case is being closely watched by other companies given that the “decision could be a template for the [Internal Revenue Service] to audit other US companies with profitable subsidiaries”.
   
• Sticking with soft drinks, the supplier of PRIME, a range of energy drinks co-founded by controversial YouTuber Logan Paul, is suing the beverage company for at least $67.7 million. Refresco, the beverage-bottling giant, claims that PRIME Hydration breached a 2023 contract by failing to order the minimum required amount of drinks in the first year of the contract. The contract was based on the high demand that PRIME was experiencing at the time, according to the complaint. However, the lawsuit alleges that by 2024, sales were falling well below expectations, and suggests that a seasonal decline, “fading social media buzz” and a series of lawsuits were at the heart of the drop in sales. PRIME is also facing other legal challenges, including a lawsuit from the US Olympic and Paralympic Committee for mismarketing itself as being affiliated with the Games.
   
• Beauty brand P.Louise has set a new UK record for the most revenue generated on TikTok Shop by a brand after making £1.5 million in just 12 hours. Other retailers, including ASOS and Zara have also joined TikTok Shop, with WHSmith looking to the app’s BookTok community and its impact on “how books are published and sold” when it decided to start selling a collection of books on the platform. ASOS launched on TikTok Shop in March, initially offering 85 products from its ASOS Design collection in a bid to boost sales. The move not only increased sales, but it also attracted 57% of transactions from new customers. Zara is also preparing to launch live shopping on TikTok in the coming months, following a successful trial in China. TikTok Shop, which enables its users to purchase products directly through the app, has been described as a “must” for brands in the generation Z space.

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