Pepsi fights to stem consumer panic over 'tampering'

PEPSI COLA in the United States, following the examples of the makers of the Tylenol painkiller and the bottlers of Perrier water, is mounting a desperate campaign to prevent consumer and investor panic, following the discovery of hypodermic syringes in tins of its soft drink.

As food retailing chains report a steady decline in Pepsi sales since the first reports surfaced last week in the state of Washington, Pepsi's campaign received a boost yesterday from the head of the US Food and Drug Administration, David Kessler, who said the claims of tampering all appear to be unfounded.

'It simply isn't logical that nation-wide tampering could have occurred, given the geographical distribution of Pepsi's bottling plants, the span of bottling dates and variety of containers supposedly contaminated,' he said.

He said three additional arrests had been made for alleged false claims in California, Michigan and Ohio, a crime that carries fines of up to dollars 250,000 and five years in jail.

Pepsico shares have been among the most active on the New York Stock Exchange, but the price has stabilised and in fact rose yesterday as the company intensified its crisis-management efforts.

Pepsi said it had examined the high-speed production lines at its 400 US bottling plants and is '99.999 per cent certain' that no tampering occurred there.

'We've gone through every can line and every plant,' Mr Weatherup said yesterday. 'All the evidence points to needles going into the cans after they were opened.' Its arch-rival, Coca-Cola, confirmed yesterday that it, too, has received reports of product tampering, but it believes both are false.

No big retailers have pulled Pepsi from their shelves, and Pepsi said it had no plans to recall its product. Source Perrier, by contrast, was forced to remove 72 million bottles of mineral water in 1990 when excessive levels of benzene were found in 13 bottles, the result of a failed filter at the Perrier source in southern France.

Johnson & Johnson, the maker of Tylenol, instantly pulled its painkiller off the market in 1982 and spent millions repackaging its products before re- introducing them. Johnson & Johnson's handling of the crisis has been widely praised by both consumer groups and public-relations experts.

Some analysts say Pepsi may lose as much as 5 per cent of its market share to Coca-Cola if the crisis continues; Coke sales represented about 41 per cent of the US market last year, compared with Pepsi's 32.4 per cent.