The health scare in Belgium damaged Coke's reputation in the most profound way because a trusted and popular brand (Belgium was one of Coke's biggest market's in terms of per capita consumption was suddenly no longer safe to drink. Any time a consumer good (particularly a food or beverage) suffers from quality problems and provokes a health scare it is a serious problem - consistent quality and safety are such implicit parts of their value proposition that this type of situation affects the brand to its very core.
Since Coke has successfully positioned itself as a drink with extremely positive connotations with a caring image of fun and harmony between people which targets quite literally every customer segment in the market, this failure to deliver its promise (and worse even put the health of consumers at risk) will provoke a response in the mind of all consumers that is fundamentally a negative one, that will clearly cause consumers to hesitate before buying and using the product which will have serious financial consequences for the company.
But in spite of this, Coca-Cola's marketing expertise and brand capital should be enough to rectify this in the long term.
Because of the recent health scares such as Mad Cow Disease that have left a strong impression on the mind of the European consumer which could clearly magnify the impact of the Coca-Cola health scare which by comparison was very minor and in retrospect may not have been directly linked to Coca-Cola consumption in any case. But in such a sensitive climate this is disastrous for Belgium and could have negative effects for the European market as well since some of the contaminated product entered other countries. But the reputational damage to Coke goes beyond the mere issue of consumers who avoid the...