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Keywords
Crisis management International business, Leadership, Management, Marketing, Case studies
Abstract
Belgium was still reeling from fears over mad cow disease and from the news that the carcinogen, dioxin, had been introduced inadvertently into animal feed, when yet another health crisis rocked it. This new crisis was precipitated by consumer complaints about an irregular taste and smell in bottled soft drinks and by reports that more than 100 consumers had become ill after noticing an odour on the outside of canned soft drinks. As a result, The Coca-Cola Company, under instructions from the Belgian Health Ministry, withdrew its trade-marked products from the Belgian market. The effects of this crisis were felt not only within Europe, but also in countries as far away as Japan and India. Subsequently, the company identified specific production and distribution problems which could have contributed to the health crisis. Pursuant to the Ministry's order, the company took immediate steps to remedy those problems, and the Ministry's ban was lifted. In addition, an aggressive marketing campaign was launched in an effort to regain consumer trust, confidence, and market share. Nevertheless, this incident resulted in substantial financial costs to The Coca-Cola Company and in considerable damage to its global image and reputation.
Introduction
First it was mad cow disease, then it was tainted animal feed. As Belgians were reeling from the crisis over cancer-causing dioxin in animal feed leading to the withdrawal of certain meats, eggs and dairy products from supermarkets, yet another health crisis rocked the nation. The effects were to be felt throughout Europe with rumblings heard as far away as Japan and India. This time it was a soft drink that was the cause for concern. On 14 June 1999, in a move that was to cost more than $200 million in expense and lost profits and cause damage to the brand image of the trade-marked products of The Coca-Cola Company (CCC), the Belgian Health Ministry ordered that Coca-Cola trademarked products be withdrawn from the Belgian market and warned Belgians not to drink any Coca-Cola trade-marked products they had in their homes. Later, France, Luxembourg and The Netherlands also banned or restricted the sale of Coca-Cola products.
The production and distribution of Coca-Cola
The CCC, with...