Public Relations Fiasco: A Case Study of Coca-Cola's Crisis in Belgium

This case study examines the Coca-Cola crisis in Belgium, which began in June 1999 when the Belgian Health Ministry banned Coke products after reports of children becoming ill. The company recalled over 30 million cans and bottles due to unusual odors and off-tastes, leading to bans in France, Spain, and Luxembourg. The crisis negatively impacted Coca-Cola's financial performance and brand reputation. The company faced criticism for allegedly knowing about the health issues before the recall and for its marketing strategies targeting children. The case highlights ethical concerns related to prioritizing sales over children's health and the impact of exclusive school contracts. Key figures like Philippe Lenfant addressed the issues, while the European Commission and the American school system criticized Coca-Cola's handling of the situation and its commercialization practices. The study concludes that earlier intervention and a stronger focus on ethical standards could have mitigated the crisis.

COCA COLA

SUMMARY OF THE ISSUE
The overall case on the Coca-Cola by different people and groups has been raised because it has
been suspected that after drinking the Coke products, there are several instances of school
children got ill and had to be hospitalised. The incident has been started in June 1999 when
Belgian Health Ministry announced their ban on the Coke drinks for being suspected of making
more than 100 children ill. Because of this predicament, the company has to recall its over 17
million cans and bottles. These issues have been found from the production plant of Antwerp
Ghent and Wilrijk, Belgium. Many children had complained of a headache, vomiting, nausea,
shivering which resulted in the hospitalisation of the children.
It has been found that the Coke and other products consumed by children has acquired some
“unusual odour” and “off-taste”. Just because of this legal and social issue government of
France, Spain and Luxembourg have also banned the Coke products. For this brand name
damage, the company has to ensure its British customers that all the products made in the
factories are safe but still there has been a reduction in the sales and consumption of the drinks
made by Coke. By the 15 June 1999, company has recalled its more than 30 million cans and
bottles which is the largest ever product recall in the business of 113 years of Coca-Cola (Gupta,
2004). For sorting the issue and making again a valuable presence in the markets company has
also reimbursed the medical costs to the people who are ill. The overall situation and the recall
have negatively affected the company’s financial performance and its income. After
understanding all the matter, analysts felt that the overall recall in Belgium can be remembered
as one of the worst public relation issues in the history of Coke.
One of the analysts alleged that the company has the knowledge about the people who had
become ill prior to the incidents and hence they blamed Coke for being unethical with the
health of children going to schools. This is the major ethical concern found in the article while
there is another concern seen by the analysts that the marketing and promotion strategy of the
Coke and other soft drinks to sell their products in more number is completely unethical and
supports obesity and unhealthy being of the children of the schools. The promotion strategy of
the Coke is majorly based on Exclusive School Contracts which can satisfactorily enhance the
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sales rate while it has been found that the health concerns among the children are increasing
with the intake of the products.
According to Centre for Commercial-Free Public Education (CCFPE), there were 46 exclusive
contracts in school districts and has increased to 150 till 1999. The strategy to promote their
products is started with the concept that the students will feel something was endorsed by the
school which can help in re-establishing the brand in the markets. in addition to this, some
groups have also opposed this commercialisation and even Alex Molnar, a Professor have
commented that it is an erosion of the culture among what is private and what is public.
Moreover, according to Troiano, overweight children are increasing rapidly in the US and found
that there are negative impacts of caffeine on the children (Gupta, 2004).
COMMENTS AND ACTIONS
PHILIPPE LENFANT, GENERAL MANAGER, COKE BELGIUM
According to Philippe, there have been some separate errors at the two plants in Belgium. At
Antwerp, the bad odour is due to the fungicide which may have fallen accidentally to the
exterior of the cans while the bad taste is because of the sub-standard gas added for
carbonation. While at the Dunkirk plant, some can might have been contaminated with a wood
preservative which resulted in this serious concern.
THE EUROPEAN COMMISSION
The commission has reprimanded that the assertiveness and the social responsibility of the
Coca-Cola do not cooperate and is unsatisfactory for the people and the government also. The
company may have found errors due to external factors, but they can’t exclude the errors were
committed at the time of selection process of plants and dosage of extracts.
THE AMERICAN SCHOOL SYSTEM
People from the schools have said that commercialisation through a promotion at schools is an
unethical practice which influences and forces the perception of children and said that this is
immoral and exploitative. Another person has said that this is an erosion of the whole culture
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which differentiates between private and public matters. There have been many health
problems also noticed by medical experts with the increasing consumption of soft drinks.
POINTS AT WHICH IF ISSUE IS RAISED, IT CAN BE
AVOIDED
If this issue has been raised at the time when the people within the company had the info
about the people who got ill but due to the inability to share the message with the legal
authorities the matter can be significantly handled and hospitalisation of children to hundreds
of people may have been avoided (Nemery, et al. 2002). In addition to this, if the Coca-Cola is
strict in its supply chain and has monitored all the activities till delivering the products to at
least retailers, these external effects can be avoided and eventually the above situation. In this
case and with the further studies done on same, it can be said that yes the ethical standards
have been broken by Coca-Cola by not caring about the health of children and only focus on
increasing the sales while there is a huge role of the people named in the case is to implement
better strategies to avoid such cases and unethical promotion activities so that future leaders
are not worried about their health rather they support development of their nation (Laufer and
Coombs, 2006).
In addition to this, if the above issue has been raised by the staff and management before
waiting for getting it severe, the inclusive management and the leaders in the company should
have emphasised on making better social relationships with their customers rather than focus
on sales and make people unhealthy.
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REFERENCES
 Gupta V., 2004. COCA-COLA'S BELGIAN CRISIS: THE PUBLIC RELATIONS FIASCO, online
available at https://www.thecasecentre.org/students/products/view&&id=20418 last
accessed on 15th April 2018.
 Laufer, D. and Coombs, W.T., 2006. How should a company respond to a product harm
crisis? The role of corporate reputation and consumer-based cues. Business Horizons,
49(5), pp.379-385.
 Nemery, B., Fischler, B., Boogaerts, M., Lison, D. and Willems, J., 2002. The coca-cola
incident in Belgium, June 1999. Food and Chemical Toxicology, 40(11), pp.1657-1667.
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