LONDON -- Food retailers in Belgium, France, Luxembourg and the Netherlands are moving to rebuild their sales of Coca-Cola after the health scare that erupted last month. Problems started after several hundred people in Belgium and France reported feeling ill after drinking Coke. The news set off a domino effect throughout continental Europe, leading to product withdrawals in the Netherlands and Luxembourg (which also are supplied by Belgian and French plants). Concerns about Coke's products were also raised in other markets, such as Portugal and Germany.
The company, meanwhile, is prepared to mount a huge marketing campaign to regain consumer confidence throughout Europe.
Coca-Cola Enterprises here, the distributor of Coke products in those countries as well as in the United Kingdom, estimated that about 14 million cases of its products were affected by the scares, which represents less than 1% of its annual volume.
CCE is 40% owned by Coca-Cola. CCE said the withdrawal of the suspect products in the four European countries will result in nonrecurring costs of about $60 million in the second quarter ended June 30. In addition, the company said, there will be a negative effect from the scare on its sales, profit and earnings per share in the quarter, but said the amount "is difficult to determine until the company can assess the effect of product reintroduction campaigns in Europe."
Coke blamed the consumers' temporary illnesses on defective carbon dioxide (at the Antwerp plant) and fungicide being accidentally sprayed on wooden pallets used to transport its products (at the Dunkirk plant). Coke's plants in Antwerp and Ghent in Belgium returned to full production after getting approval to reopen from the Belgian government June 23.
The government had ordered the company to close its two plants June 14 and to remove all its products in bottles and cans from stores. In addition to Coke, this included Minute Maid orange juice, Aquarius mineral water, Nestea, Fanta and Sprite. The noncarbonated drinks were allowed back onto store shelves several days later.
The plants were allowed to reopen only after Coke agreed to destroy all its available stocks of Coke, Fanta and Sprite in Belgium. The French government, which had ordered the closure of Coke's Dunkirk plant June 15, allowed it to reopen June 24.
A spokesman for Delhaize "Le Lion," Belgium's largest food retailer, said the company expected to begin receiving new Coke products for its more than 480 stores in Belgium within two to three days. Delhaize has seen no significant drop in sales of soft drinks during the scare, he said, adding consumers switched from Coke to other brands or to mineral water.
The spokesman could not predict the long-term effect of the scare on sales of Coke. But he said that, in Delhaize's view, the business of rebuilding sales of Coke was up to the soft-drinks company and not to Delhaize.
A spokeswoman for Albert Heijn, the largest food retailer in the Netherlands, said the scare there was restricted to half-liter and one-liter glass bottles and cans of Coke. These products were removed from shelves June 14, but late last week Albert Heijn was restocking the liter glass bottles and expected to receive the remaining products "as soon as possible."
"We have not noticed any change in sales of Coke during this time, because we still had some products on our shelves," she said.
