Coca-Cola's Belgian Crisis - The Public Relations Fiasco

            
 
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Case Details:

Case Code : MKTG097
Case Length : 12 Pages
Period : 1999
Organization : Coca Cola
Pub Date : 2004
Teaching Note :Not Available
Countries : Belgium, Europe
Industry : Beverages - Carbonated Soft Drinks

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

The Fiasco

The Belgian crisis broke out on June 08, 1999. Thirty-three children aged between 11 and 13 of St. Mary School in Bornem, Brussels, complained of headaches, discomfort, dizziness and nausea. A few vomited and were sent home. The school management then made efforts to find out why so many students had fallen ill. The enquiry revealed that students had drunk Coke shortly before they began complaining of their illness. The Coke had arrived at the school packed in cases of 20-centiliter glass bottles that were shipped from Coca-Cola's bottling plant in Antwerp.

The same day, the plant's management was called and briefed about the children falling ill after drinking Coke...

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

The Explanation

With things not going their way, Coca-Cola's executives came forward with an explanation of what had gone wrong. They claimed that their experts had investigated the problem by testing the suspect batches for chemicals and the tests showed nothing toxic in the beverages. Explaining the reasons for the crisis, Philippe Lenfant (Lenfant), General Manager, Coca-Cola, Belgium, said that there had been separate errors at two plants. The products from Antwerp had developed an odd, sulphuric smell and unpleasant taste because of sub-standard carbon-dioxide used to carbonate the products...

The Aftermath

Coca-Cola's financial performance suffered a major setback due to the Belgian crisis. The recall had a negative impact on Coca-Cola's overall second-quarter net income in the fiscal year 1999, coming down by 21% to $942 million. Moreover, the entire operation of removing and destroying recalled products cost Coca-Cola Enterprises $103 million (£66 million). The recall led to a 5% decline in the bottler's revenues and a fall in cash operating profit by 6%. Coca-Cola's brand image was hit among Belgian consumers; a market that had been one of Europe's most successful for the company...

Exhibits

Exhibit I: The Coca-Cola Promise
Exhibit II: Coca-Cola's Quality Statement
Exhibit III: The Coca-Cola Safety Policy
Exhibit IV: Coca-Cola - History of Purity


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