California vs. Pepsi, Nestlé, Kellogg and Eight Others: The Lawsuit Shaking Up Ultra-Processed Foods

Eleven of the world’s largest food and beverage companies are facing a lawsuit that puts the economic model of ultra-processed foods under scrutiny. Filed in the United States, the case does not focus on a specific product, but on business practices replicated on a global scale—including markets such as Mexico.

Coca-Cola, Conagra, General Mills, Kellanova, Kellogg, Kraft Heinz, Mars, Mondelez, Nestlé, PepsiCo and Post are named in the lawsuit filed on December 12, 2025, by San Francisco District Attorney David Chiu. In Mexico, these companies carry tangible weight: according to SiiLA, they account for roughly 27% of the industrial space occupied by the food and beverage industry, a segment that, based on INEGI data, contributes nearly 2% of national GDP.

The district attorney’s filing argues that a significant portion of the industry designed products and strategies to stimulate compulsive consumption, through marketing aimed at shaping habits from childhood and a commercial architecture that shifts the costs of that behavior—health, productivity and public spending—onto society at large.

For Oliver Galindo, an attorney specializing in regulatory law, the critical issue is not the nutritional debate, but the corporate standard the case could establish.

“When it is shown that a company knew about the harmful effects of a product and nevertheless structured its commercialization to expand consumption, the issue stops being a public-health matter and becomes a legal one,” he explains. In that framework, the lawsuit does not challenge the sale of a legal product, but a business model that systematically internalizes benefits and externalizes harm. It is a standard that has already reshaped industries such as tobacco, opioids and lead-based paints, and is now extending to ultra-processed foods.

If the case moves forward, its impact will not be measured solely in courtrooms, but in the industry’s overall risk calculus. The lawsuit raises the possibility that practices long considered standard—from formulation to marketing—could be evaluated under stricter legal standards, with direct implications for costs, insurance, disclosure and the valuation of global brands, even in markets where regulation has historically been more permissive.

In Mexico’s case, the most relevant precedent would not be the lawsuit itself, but the evidence that emerges from the process.

According to Galindo, the strength of the U.S. system lies in its ability to compel the disclosure of internal information, subject executives to questioning and develop scientific evidence under rigorous standards. If the San Francisco trial documents prior knowledge of harm and deliberate decisions to sustain commercialization, that material could be used by authorities and plaintiffs in other countries—including Mexico—without having to reconstruct the facts from scratch.

Translating that precedent to Mexico, however, would not be automatic. Galindo warns that the challenge would be maintaining the same evidentiary and legal rigor. Without it, the precedent would not lead to effective accountability but to a symbolic gesture with no real consequences, in a country where the economic impact of ultra-processed food consumption has already been documented.

According to the Bank of Mexico, consumption of ultra-processed foods has risen steadily over the past two decades and now accounts for close to one-third of total household caloric intake, with remarkably rapid growth in regions such as the south of the country. The central bank notes that this pattern carries not only health implications but also economic ones: lower labor productivity, erosion of human capital, and increased pressure on public health spending.

In that context, for companies whose value depends on global brands, extensive supply chains and ongoing access to capital, the debate is no longer regulatory or reputational, but structural: how much it costs—and who pays—when a business model begins to be evaluated not only for its profitability, but for its long-term economic externalities.

More analysis and industrial sector data at SiiLA REsource or at contacto@siila.com.mx.