Coke taps Publicis to stanch crisis

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Coca-Cola Co., finally moving to stem a tidal wave of bad publicity over tainted cans of Coke, appointed Publicis to spearhead crisis communications.

A Coca-Cola account exec at Publicis' Brussels office confirmed the appointment, and said more details about the communications plan will emerge this week. Publicis is also expected to handle a similar crisis management effort in France. Publicis already is on the Coke roster, with other work in Europe as well as Australia and Mexico.

A Coca-Cola spokesman in Brussels refused to comment.

Both France and Belgium pulled various Coca-Cola brands off supermarket shelves last week following complaints that 200 people became nauseous and dizzy after drinking Coke products.

MADE HEADLINES WORLDWIDE

The contamination scare underscores the challenges facing marketers as they build global brands. Coverage of the crisis, and criticism of Coca-Cola's slow response, made headlines not just in Brussels and France, but around the world. Coca-Cola is one of the most recognizable brand names on the planet, so bad publicity in one country can put its image at risk in many.

Publicis Chairman Maurice Levy is experienced at crisis management. When Nestle acquired Perrier in 1992 in a $1.6 billion deal that was initially unpopular, Mr. Levy stepped in to help.

His effort paid off when Perrier awarded its account to Publicis (in 1997, the business moved to Ogilvy & Mather Worldwide, Paris). Perrier had its own crisis in 1990, when the mineral water became contaminated by benzene. Unlike Coca-Cola however, Perrier immediately shut its factory and supported a product recall.

RIVALS LOOK TO PROFIT

Coca-Cola's rivals are looking to profit from the leader's woes. Richard Branson's Virgin Group reports unprecedented demand for Virgin Cola in Belgium. Chaudfontaine, the company distributing Virgin Cola in Belgium, said it is having trouble meeting demand from retailers that pulled Coke. Pepsi-Cola Co.'s sales have also risen.

Neither company is planning to use ads to take advantage of the Coke crisis.

"We will be making no change to our advertising schedule or our in-store promotion," said Philip de Brest, Chaudfontaine's group marketing director.

But he was quick to criticize Coke's sluggish reaction to an international crisis.

'SERIOUS MISTAKES'

"I think Coca-Cola has made serious mistakes in managing the situation and I feel they should have been more open about the problem," he said. "If they had behaved more like Perrier when it had its problem, it would have looked better."

Coca-Cola CEO Douglas Ivester flew to Belgium late last week as the crisis intensified. Even if it calms down quickly, however, there could be lasting repercussions. Coca-Cola is locked in a battle with French regulators who are blocking the U.S. soft-drink company's bid to buy the popular French soft drink Orangina from Pernod-Ricard. This latest stumble certainly won't win the company new supporters.

Copyright June 1999, Crain Communications Inc.

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