Coke withdraws Dasani in UK
Britain after finding that samples contained higher than permitted
levels of the chemical bromate. A Coca-Cola spokesman said that the
voluntary withdrawal was a precautionary measure, and that only the
UK would be affected.
"We haven't yet confirmed when and how we'll be back in the market," spokesman Jonathan Chandler told Reuters. "We'll make a communication on the next steps when we're ready to make them." The UK's Food Standards Agency said that although there was no immediate risk to public health, Coca-Cola's decision to stop selling Dasani in Britain was sensible. The agency describes bromate as "a chemical that could cause an increased cancer risk as a result of long-term exposure, although there is no immediate risk to public health".
In a statement, Coca-Cola said that the contamination had been initially caused by its regular practice of adding calcium to Dasani, calcium which in this case "did not meet our quality standards". As a result, bromate went on to be formed during the manufacturing processes.
The UK limit for bromate in bottled and tap water is 10 parts per billion, while the Dasani samples had tested between 10 and 22 parts per billions, Reuters reported.
Shares of Coca-Cola fell 26 cents on Friday to close at $48.78 on the New York Stock Exchange. The recall of about 500,000 bottles was completed in less 24 hours.
Coca-Cola has not had a great start to the year. The recall is an embarrassment for the drinks giant, which has faced criticism for selling what is treated and purified tap water, and the issue of the recall follows the disclosure in February that US federal investigators were investigating the company's dealings with Japanese firm Takasago International in connection with allegations of channel stuffing.
It was alleged that the beverage giant overstated financial results for several years by shipping excessive beverage concentrates to Japan.
Channel-stuffing refers to the practice of convincing clients to accept unwanted or early deliveries of a product. The method is used to pad revenue, and can help a firm meet quarterly financial targets. Rebates, extended payment terms and other incentives are often provided to clients in exchange for their complicity.
According to a Wall Street Journal report, the Securities and Exchange Commission and the US Attorney's Office are currently investigating whether Coca-Cola is guilty of 'channel stuffing' in order to artificially boost profit forecast and sales. The report says that investigators have focused on Douglas Daft, Coca-Cola's chairman and chief executive who announced his plans to retire on 19 February.
The Atlanta-based soft drinks giant said that it was cooperating with the Securities and Exchange Commission and US Department of Justice. The investigation began after an ex-worker claimed that the company had overstated revenue and engaged in bogus transactions.
Coke sales in Japan account for one-fifth, or about $1 billion (€802m), of its entire operating income per year.
