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Coke identifies taint source
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June 25, 1999: 7:18 a.m. ET
Beverage maker says phenol, a disinfectant, tainted 800 shipping pallets
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LONDON (CNNfn) - Coca-Cola said it has detected traces of the chemical phenol, a disinfectant used in the manufacture of products ranging from resins to explosives, on 800 of 150,000 wooden pallets the company used to ship its soft drinks from a beverage plant in Dunkirk, France.
Coke's announcement, made late Thursday, marked the first time that the world's most widely-known brand had identified the contaminant responsible for the largest recall in the company's 113-year history.
"All of the pallets which were contaminated have been withdrawn," Henry Schimberg, the head of Coke's bottling division, Coca-Cola Enterprises (CCE), told reporters Thursday. Coca-Cola Enterprises is forty percent owned by Coca-Cola Co. (KO)
The recall affected some or all of Coca-Cola's signature brands such as Coke, Diet Coke, Sprite and Fanta in France, Belgium, the Netherlands, Luxembourg and other countries that imported the company's soft drinks from Belgium and France.
Schimberg estimated the recall cost Coke $60 million in lost sales. That represents less than 1 percent of the company's total annual volume of 14 million unit cases, with a unit defined by Coke as an eight-ounce serving.
Analysts say the recall is likely to dent Coke's bottom line in the short-term, though the company is likely to weather the crisis in the longer term thanks in part to its iron-clad reputation as one of the world's most trusted brands.
A pallet contains 2,640 cans, but as few as 20 cans per pallet were likely tainted by phenol, a spokesman for Coke Enterprises told Reuters.
On Wednesday, Belgium gave a green light to the resumption of Coke sales. Nine days earlier, Belgium had pulled the soft drinks from store shelves after more than 200 people fell ill after drinking Coke products.
Toxicology tests concluded that sub-standard carbon dioxide had accidentally found its way into Coke products at two Belgian plants. Carbon dioxide creates the fizz in Coke soft drinks.
After an initial silence, Coke sought to reassure health officials that the tainting posed no serious health risk and that the problem had been isolated and addressed. Belgian authorities, for their part, suggested some consumers may have overreacted to the scare, triggering a psychosomatic reaction.
French authorities Thursday lifted their ban on sales of Coca-Cola products made at the Dunkirk facility after the country's food-safety watchdog concluded the drinks were safe to consume.
Production at the Dunkirk plant is expected to resume soon.
Shares of Coca-Cola Enterprises finished down 11/16 at 31-11/16 Thursday, while Coca-Cola Co. stock climbed 7/16 to close at 31-9/16.
--from staff and wire reports
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Coca-Cola Co.
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