We shall examine a crisis issue, initially raised in the U.S., concerning the revealed carcinogenic benzene impurities in the famous Perrier bottled water.
In the growing U.S. bottled water market, Perrier is the largest water company, heaving 9 brands and commanding 57% of the U.S. market for imported bottled water, with following large sales and revenues.
The major elements of this success lie on the very efficient reputation management of the company, based on the characteristics of a spring water in France, followed by proper advertisement and distribution networks.
On February, 1990 a N. Carolina laboratory discovered benzene in samples of Perrier that had been bottled six months before; New York Times announced on February 11 that on February 10, production had been halted worldwide on Perrier. Thus, this company had entered a period of crisis. What would happen when consumers find that not only is the product not pure, but it may contain substances that are more harmful than they would find in their tap water.
The whole product reputation may collapse.
This crisis has the characteristics of a smoldering one, as it has been a serious business problem not generally known within or without the company, which has already gone public, generating negative news coverage. As we shall see below, the source company did not apply the best crisis management frameworks for problem solving.
The day by day events of the case have as follows:
* Feb 3, 1990: A laboratory in N. Carolina has discovered 12.9 to 19.9 parts per billion of benzene (permissible limit 5.0), a known carcinogen in samples of Perrier, bottled 6 months before.
* Feb 3-9, 1990: Perrier conducts its own tests.
* Feb 9, 1990: Perrier stock at 1,692 francs a share
* Feb 11, 1990: N.Y. Times announces that on Feb...