here takes a critical look at the recent face-off between the Consumer Protection Council (CPC), and the Coca Cola family over alleged nonchalant attitude of the beverage company to consumer rights and questions the way the issue was swept under the carpet.
The 2014 crisis between the Consumer Protection Council (CPC) and the Coca-Cola Company and its bottling subsidiary, Nigeria Bottling Company (NBC) was expected to be an eye opener in the Nigerian market. But by February this year, despite the popular interest in the issue, it was resolved in a suspicious manner. The problem commenced on the 3rd of September 2013 when the CPC received a complaint from a consumer, regarding two half-empty cans of “Sprite” purchased in Abuja, FCT. Within a few months, the issue has created many problems for both organisations.
For Coca Cola brand, the crisis was the peak of its crisis in the Nigerian market. Before now, the name of the world’s no 1 brand had come up in a few scandals. Its crisis is not however limited to the local market. This, according to some analysts could be linked to the traditional arrogance of the brand. For instance, Coca-Cola was the leading soft drink brand in India until 1997 when it temporarily lost the market because of its decision not to reveal its formula to the government and reduce its equity stake as required by the Foreign Exchange Regulations Act. Finally, Coke returned some years later which ensured that Coke was now the leading soft drink brand of the world. From 1993-2003, they invested more than US$1 billion in India, making it one of the country’s top international investors.
Similarly, an embarrassing public relations disaster in Belgium few years ago cost one of its largest bottling operations $103m (£66m) while its mid-European bottle venture revealed a surprise 5% fall in first half sales. Also, the Atlanta-based Coca-Cola Enterprises, the bottling arm which distributes Coke in the UK, France and Belgium, had sometimes revealed that 17m cases of Coke had been recalled after the contamination scare, which spread from Belgium across Europe. Although the explained that this was less than 1% of its total annual volume, the $103 million lost was almost double its initial estimate.
The CPC/Coca-cola case was as a result of a complaint in 2013, which the CPC acted upon according to Economic Confidential sources but it was against the backdrop of similar incidents regarding the quantity of consumable products produced and marketed by the company. CPC thus was forced to act in public interest and its regulatory role. The investigation dragnet was extended to both Coca-Cola Nigeria Limited (Coca-Cola) and Nigerian Bottling Company (NBC).
The council panel invited both companies to provide their responses or positions regarding the complaint, and also provided the firms repeated opportunities to make representations, provide information and address sundry issues arising out of the complaint and their operations.
It was learnt that the panel, after the investigation, substantiated the allegation of product defect and violation of the CPC Act and other Nigerian consumer protection laws. The investigation was reported to have found out among others that the cans of Sprite did not conform to ordinary standard of care and implied assurance and reasonable expectation that they are of the same average grade, quality and value as similar product sold under similar circumstances. It also revealed that the cans of Sprite were indeed defective and posed a danger to public health given the national distribution network of Coca-Cola products. With this, the council believed that there was apparent flaw in the efficient implementation of one of Coca-Cola’s vital quality assurance tool – traceability.
Though the issue has been resolved, there are insinuations in some quarters that some influential people within the public and corporate Nigeria played some dirty roles to blackmail the government agency. With the way the issue was cleverly resolved, it is believed that another effort to make consumers get respect from manufacturers has frustrated.
Meanwhile, aside many organisations and individuals, the Nigerian Employers Consultative Council (NECA) and the Association of Food, Beverages and Tobacco Employees (AFBTE) were said to have played a significant role towards ensuring that CPC drops charges against Coca-Cola and NBC. Another organization that was believed to have played a prominent role is The Quadrant Company, the PR agency that managed the crisis. The agency was said to have employed many influential people to comment in favour of the company. Though they described the move as being in line with national Interest, not a few people dismissed it as a cheap way to prevent CPC from safeguarding both consumer and industry interests through balanced regulation.
It is obvious that the storm is over, but the question analysts are asking is; what is next for Coca-Cola? Giving the fact that Coca-Cola is a global brand and this breach of act is not the first time, the public is watching with keen interest.
On the other hand, from previous experience, the expectation is that as a matter of due diligence, CPC should have sought to collaborate with sister agencies that are fully equipped to deal with issues of product quality and safety such as NAFDAC and SON in carrying out the said investigation, especially as it relates to the level of risk that the two cans posed to a consumer. Because there was no such collaboration, many people dismissed CPC and its findings. The issue generated lots of debate among stakeholders with two civil society groups championing the course.
The groups had in a statement jointly signed by the director, Centre for Rights and Grassroots Initiative, Nelson Ekujumi, and programme director at Centre for Governance and Qualitative Studies Fadeyi Olalekan, campaigned that CPC was acting beyond the laws establishing it and acting out an ambiguous script in the guise of defending consumers.
The statement reads in part, “The Act establishing CPC clearly foresaw the need to rule out speculations as the basis for its decision by the provision in section 14 that “In the discharge of its functions under this Decree, the Council may seek collaboration with government agencies.
“It is cause for concern where the CPC is arrogating to itself the powers to impose a whooping N100,050,000 against Coca-Cola Nigeria and Nigeria Bottling Company over a consumer complaint which the regulator has been celebrating in the media.”