Perhaps the most damaging of Coca-Cola’s crises—and a situation dreaded by every company—began in June 1999 when about thirty Belgian children became ill after consuming Coke products. Although the company issued an isolated product recall, the problem escalated. The Belgian government eventually ordered the recall of all Coca-Cola products, which prompted officials in Luxembourg and the Netherlands to recall Coke products as well. Coca-Cola finally determined that the illnesses were the result of an improperly processed batch of carbon dioxide. Coca-Cola was slow to issue a response to the problem, taking several days to address the media. The company had initially judged the problem to be minor and did not immediately investigate the extent of the issue. The slow response time led to a public relations nightmare. France soon reported more than 100 people sick from bad Coke and temporarily banned all Coca-Cola products as well. Soon thereafter, a shipment of Bonaqua, a new Coca-Cola water product, arrived in Poland contaminated with mold. In each of these instances, the company’s slow responses and failure to acknowledge the severity of the situation harmed its reputation and cast doubt on then-CEO Ivester’s ability to successfully lead. The contamination crisis was exacerbated in December 1999 when Belgium ordered CocaCola to halt the “Restore” marketing campaign it had launched in order to regain consumer trust and sales in Belgium. A rival firm claimed that the campaign strategy—which included free cases of the product, discounts to wholesalers and retailers, and extra promotion personnel—was unlawful. The claim was upheld under Belgium’s strict antitrust laws, and Coca-Cola was forced to abandon the campaign. This decision, following the previous crisis, further reduced Coca-Cola’s market standing in Europe.

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