Case IV Brands — Cola brands fizzing after allegations

Media spin:

'India loses faith in Pepsi, Coca-Cola⁹

Allegations that two of the world's biggest and best-known brands, Pepsi and Coca-Cola, sold colas in India containing excessive levels of toxic chemicals, were met with unnecessarily belligerent communica­tions responses. India's Centre for Science and Environment (CSE) suggested that the toxin levels far exceeded those permitted in soft drink formulations sold in EU countries, signaling that there was а real PR disaster in the making.

Flat denials

The companies started to fizz when the CSE - a national environ­mental watchdog – claimed cola samples it had tested contained four toxic chemicals: lindane, DDT, marathon and chlorpyrifos. However, both Pepsi and Coke chose not to respond with concerned or concil­iatory tones or even to calmly and confidently call for independent third-party tests to be organized. If they'd done so, they might have exhibited the traits of very human and very professional, socially responsible corporations. Instead, they arrogantly insisted that their products had passed stringent quality tests set by accredited Indian and international laboratories. And their tone of voice in doing so patently upset a lot of people.

Even as Pepsi was insisting that its products were perfectly safe, a government laboratory was confirming that some of its soft drinks had much higher levels of pesticides than EU norms. Pepsi sought to hide behind the supposed endorsement of the Union Health Minister Sushma Swaraj who, Pepsi claimed, had endorsed its product's safety. Presuming that this pronouncement would quell any customer dis­quiet, Pepsico added with some finality, 'We have nothing further to add.'

It was unfortunate for them, though, that Swaraj did have more to add. Swaraj went on record to re-affirm the findings of much higher pesticide levels than normal, claiming that indene was present in all the soft drinks tested yet higher by 1.1 to 1.4 times the European norms in 33 per cent of the samples. Talk about lies, damned lies and statistics!

Pep talk

Strong consumer reactions followed these revelations, with the Indian parliament banning its cafeterias from serving Pepsi and Coke. Then, the country's defense ministry also issued a call to its clubs to stop selling the drinks.

As both of the cola rivals continued to strenuously deny that their products exceeded safe limits for pesticide presence, Pepsi publicly challenged the CSE's credibility and, by inference, its findings, and proceeded to legally contest bans issued against its products.

Despite both cola giants welcoming news that the Indian health ministry had agreed to order independent tests, Pepsi talked tough and aggressively filed a writ in Delhi that sought, as one of its goals, High Court intervention against the government itself. Pepsi wanted to prevent the government from acting on the information contained in the CSE report damningly entitled, 'Analysis of Pesticide Residue in Soft Drinks'. Pepsi also sought a restraining order to prevent the CSE from publishing any 'unsubstantiated statements' and to 'withdraw all such material from circulation and its website'.

Any switched-on modern organization knows that any information that has been posted on the Web will circulate and can be retrieved whether or not it stays at the source of its original posting. Like try­ing to trap air in a butterfly net, Pepsi's legal moves against the CSE were pure folly and only portrayed them as wanting to cover up information relating to its product.

Of course, Pepsi's maneuverings merely pepped-up media interest in the story.

Coke edict

Not to be outdone for high-handedness, Coca-Cola filed a case in the Bombay High Court to challenge the Maharashtra government's con­fiscation of packaged Coke product from a local factory, following the report of the alleged pesticide content. Coke also claimed that the offi­cer who seized the stock did not have the power to do so or to order a ban on the sale and distribution of the seized stock.

Again, this was hardly likely to solicit a favorable response or por­tray Coke in a positive light as reportage of the case was published. Coke's action breached one of the fundamentals of issues manage­ment, which is to try to isolate - and keep attention focused on - the core issue. Challenging an ordinary person's job description or authority did little to quell disquiet or win friends. In fact, Coke's actions could have been construed as the big boys trying to push a lit­tle guy around - and the media just love to protect the little guy. Subsequently, the state government countered Coke's position and actually endorsed the ban, saying such powers were permitted by the rules of India's Prevention of Food Adulteration Act.