Coca-Cola and Business Ethics
By: Vanessa Brhamadat
What Happened?
On June 13, 1999, Coca Cola was suspected of making over 300 school children sick. Children complained of headache, nausea, vomiting and shivering after drinking Cola’s beverages. Coca Cola had to take back 30 million cans and bottles. The beverage was banned in Belgium, France, Spain and Luxembourg
Whose Fault?
Analysts blamed Coke's promotion strategy to sell soft drinks to school children. Apparently there was something in the drink because children reported an 'unusual odor' and an 'off-taste' in the drink.
What Were the Effects?
For the first time, the entire inventory of Coke's products from one country were banned from sale. There was a significant negative impact on Coke's financial performance, its second-quarter net income came down by 21% to $942 million. The entire reimbursement for medical treatment and lawsuits totaled over $103 million. There was a 5% decline in revenues as well.
What was Coke’s mistake?
The Coca Cola company forgot to look at one of the most important things; to focus on the health of the customer. Analysts felt that the bottle recall was one of the worst public relations problems in Coke's history. Coca Cola ignored its social responsibility which caused them to lose profits and customers.