Company director Steve Shaw said a letter from the NZ Rugby Union had suggested that Coca-Cola was threatening to "significantly reduce its sponsorship" should Williams endorse Pure Energy.
"This is a very sad situation as... [Pure Energy] was a perfect fit with Sonny Bill Williams and therefore had the possibility of netting the rugby and boxing star some very substantial sponsorship fees," Mr Shaw said.
Williams has repeatedly said he intends to sign with the NZRU for a further 12 months, and the Blues and Chiefs are in a race to secure his Super rugby services.
But the negotiations have been protracted to the point where All Black coach Graham Henry - preparing the team for their Tri-Nations decider against Australia in Brisbane tonight - admitted he was surprised at how long they had dragged on.
It appears the drinks stand-off could be be a deal-breaker, and that has brought claims of hypocrisy.
"They have double standards by allowing Dan Carter and Richie McCaw to have personal endorsements with a water brand that competes with Coca-Cola's Pump water," Mr Shaw said.
Carter and McCaw formed their own water brand, For Everyone, in 2009, though the brand has struggled to make money and was ticked off by the Companies Office for failing to file annual returns on time.
Mr Shaw has suggested that if Coca-Cola was playing hard-ball, it should open the sponsorship tender to other interested parties.
NZRU commercial manager Paul Dalton said the objection to the planned endorsement was an "employment matter".
"While the NZRU did object to a proposed personal promotion for Sonny Bill, we continue to work on facilitating other opportunities for him," Mr Dalton said.
"The circumstances between this and the Water for Everyone situation two years ago are very different."
A Coca-Cola spokeswoman said the company would not comment on the sponsorships of other brands or the NZRU negotiations with Williams.
The NZRU has not had a smooth ride on the sponsorship front of late. Two of its biggest backers, Telecom and adidas, lurched into public relations disasters.
Telecom's "Abstain for the Game" advertising campaign was universally pilloried, while adidas alienated large sections of rugby's fan base by over-charging on replica jerseys.
The dropping of Williams for tonight's clash with the Wallabies has raised eyebrows in the Williams' camp.
Close confidante Anthony Mundine, the former league star-turned-boxer who is also managed by Nasser, tweeted: "Why the hell ain't the all blacks playing SBW ... I think it's crazy???he one of the best if not the best backs in game!!!is there an agenda ???"
Meanwhile, All Blacks great John Kirwan says Williams should be used on the wing during the Rugby World Cup. Kirwan said the selectors needed to find room for Williams in the side and he would have no problem at the end of the backline.
The former All Black - now Japan's coach - told NewstalkZB that Williams was so talented that the switch from centre wouldn't be a problem.
