Corporate Credibility Lost: Coca-Cola China Says Beverage Not Poisonous

Let's start with the fact that someone died. And that someone was a child. Common sense dictates that a media-savvy - and ethical - corporation expresses sorrow and says it will investigate.

Claiming there was 'no product quality issue?'

Uh, does Coke remember what happened the last time it tried that gambit? That was in 1999 and some Belgian school children got sick from what may have been a tainted batch of CO2. Coke chose not only to deny responsibility but to blame the children. Result: several hundred million in lost profits, more than a billion in lost stock price, a derailed Orangina acquisition and, eventually, a fired CEO.

So, let's start with the supposition that having to deny your product is poisonous does not give you command of either the moral or tactical high ground. No matter what the culture and what the product, presuming your own innocence is not likely to win friends and influence regulators. That you are attempting to do this in a country with plenty of ethical lapses of its own, so that making yourself a foreign culprit to make an example of is a gift.

Product liability is a quality issue, an operational issue, a reputational and brand issue, and an ethical issue. There is nothing in the course of business it does not touch. Send the lawyers and flacks back to their desks and let a sentient adult take charge. Sheesh. JL

Stan Abrams reports in Business Insider:

Coca-Cola said Friday there was no “product quality issue” with its Pulpy Milky drinks, after a boy who had consumed the product died and three others fell ill.

Stores around the country pulled bottles of the fruit-flavoured milk drink from their shelves

after a boy died and his mother fell into a coma in the northeastern Chinese province of Jilin.

Two other people, a mother and daughter, were also hospitalised after drinking a bottle of Pulpy Milky, but have since recovered and returned home.

Investigators have said the drinks were tainted with organic phosphorous, a toxic pesticide[.]

I don’t know about you, but it seems to me that Coke is kinda screwed on this one. Even if an investigation finds some crazed lunatic out there deliberately putting pesticide in bottles of “Pulpy Milky” (barf), Coke is going to take a big hit. Remember what happened to Tylenol back in 1982? Nasty situation.

I’m sure that the PR folks out there have endlessly case studied the Tylenol horror show and now have detailed crisis management instructions in place for just such an eventuality. But when the Wall Street Journal runs an article with this headline: “Coke Says China Juice Drinks Not Toxic,” I think Coke may find it a challenge to dig itself out of this hole.

Moreover, I’m not sure that this helps:

“This case does not involve a product quality issue,” said Joanna Price, Coca-Cola’s China-based spokeswoman, without elaborating.

Well, just what does that mean anyway? I had already assumed that pesticide is not part of the normal manufacturing process of this stuff. If that’s true, then the toxic substance either found its way into the beverage while it was under the control of Coke or when it was in the hands of a third party (e.g. during transport, with a wholesaler, or at a retail establishment).

Either way, this is not a question of ensuring that the usual ingredients are up to spec, that the bottling machinery has not been contaminated, etc. This is, one would hope, the introduction of a substance foreign to the process of making this particular concoction.

Couldn’t Coke have simply said that they have confidence in their quality control procedures, that they are cooperating fully with the authorities, and that an investigation will be completed ASAP?