Coca-Cola and Business Coca-Cola and Business EthicsEthics

By: Vanessa BrhamadatBy: Vanessa Brhamadat

What Happened?What Happened?

On June 13, 1999, Coca Cola was On June 13, 1999, Coca Cola was suspected of making over 300 school suspected of making over 300 school children sick.children sick.

Children Children complained of headache, complained of headache, nausea, vomiting and shivering after nausea, vomiting and shivering after drinking Cola’s beverages.drinking Cola’s beverages.

Coca Cola had to take back 30 million Coca Cola had to take back 30 million cans and bottles.cans and bottles.

The beverage was banned in Belgium, The beverage was banned in Belgium, France, Spain and Luxembourg France, Spain and Luxembourg

Whose Fault?Whose Fault?

Analysts Analysts blamed blamed Coke's promotion Coke's promotion strategy to sell soft strategy to sell soft drinks to school drinks to school children. Apparently children. Apparently there was something there was something in the drink because in the drink because children reported an children reported an 'unusual odor' and an 'unusual odor' and an 'off-taste' in the drink. 'off-taste' in the drink.

What Were the Effects?What Were the Effects? For the first time, the entire inventory of Coke's For the first time, the entire inventory of Coke's

products from one country were banned from products from one country were banned from sale. sale.

There was a significant negative impact on There was a significant negative impact on Coke's financial performance, its second-Coke's financial performance, its second-quarter net income came down by 21% to quarter net income came down by 21% to $942 million. $942 million.

The entire reimbursement for medical The entire reimbursement for medical treatment and lawsuits totaled over $103 treatment and lawsuits totaled over $103 million. million.

There was a 5% decline in revenues as well.There was a 5% decline in revenues as well.

What was Coke’s mistake?What was Coke’s mistake?

The Coca Cola company forgot The Coca Cola company forgot to look at one of the most to look at one of the most important things; important things; to focus on the to focus on the health of the customer.health of the customer. Analysts Analysts felt that the bottle recall was felt that the bottle recall was one of the worst public relations one of the worst public relations problems in Coke's history. Coca problems in Coke's history. Coca Cola ignored its social Cola ignored its social responsibility which caused responsibility which caused them to lose profits and them to lose profits and customers.customers.