Coke - Ethical Issues

Abstract

The case discusses the crisis faced by Coke in Europe when people fell ill after consuming its products. The case also brings out the ethical dimensions involved in Coke’s exclusive school contracts, which was done to promote soft drink sales among school children.

"Our product is quite healthy. Fluid replenishment is a key to health. Coke does a great service because it encourages people to take in more and more liquids."

- Michael Douglas Ivester, Coke's Chairman and CEO.

"Public schools are funded by the public to educate the children as provided by state law. It is totally inappropriate that its facilities and employees are being used by corporations to increase their own profits on public time and with public dollars."

- Dr. Brita Butler-Wall, Executive Director, Citizens' Campaign for Commercial-Free Schools, US.

THE RECALL

On June 13, 1999, Coca-Cola (Coke) recalled over 15 million cans and bottles after the Belgian Health Ministry announced a ban on Coke's drinks, which were suspected of making more than 100 school children ill in the preceding six days.

In a statement to Reuters, Marc Pattin, a spokesman for the Belgian Health Ministry explained the seriousness of the issue: "Another 44 children had become ill with stomach pains, 42 of them at a school in Lochristi, near Ghent, northwest Belgium. We have had five or six cases of poisoning of young people who had stomach pain after drinking (the suspect beverages)."

In the same week, the governments of France, Spain and Luxembourg also banned Coke's products while Coke's Dutch arm recalled all products that had come from its Belgium plant. The entire episode left more than 200 Belgians and French, mostly school children, ill after drinking the Coke produced at Antwerp and Dunkirk. The company had to assure its British customers that the products made in its UK factories were safe. By June 15, 1999, Coke had recalled about 30 million cans and bottles, the largest ever product recall in its 113-year history. For the first time, the entire inventory of Coke's products from one country were banned from sale.

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        Case Code   BECG014
   Case Length    12 Pages
              Period    1999 - 2001
 Organization     Coke, Belgian Health Ministry,
        Pub Date     2002
Teaching Note    Available
     Countries    Belgium
      Industry    Food & Beverages

Issues    Unethical Practices in Companies

Coke, Europe, consuming, products, school contracts, soft drink, sales, children, case Study, Business ethics

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.