Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, July 27, 1993 TAG: 9307270121
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: BOB DROGIN LOS ANGELES TIMES
DATELINE: MANILA, PHILIPPINES LENGTH: Long
From her tin-roofed shack in one of Manila's more squalid slums, Victoria Angelo couldn't resist. The unemployed mother of five and her husband, Juanito, who pedals people about in his three-wheeled cab for about $4 a day, began drinking Pepsi with every meal and snack. Each morning, the family prayed for a specially marked bottle cap. And each night, they and neighbors flocked around a small television to see if their prayers were answered.
And then, a miracle!
On May 25 last year, the nightly news announced that anyone holding a bottle cap marked 349 had won up to 1 million pesos, about $40,000, tax-free.
Spreading her collection of caps on a table, Victoria Angelo screamed, "We are a millionaire!"
Her voice ringing with excitement, she recalled that she turned to her family: "I tell my children you can finish school and go to college. I tell my husband he can buy a [passenger jeep]. I tell myself we can buy a real house. Can you imagine? It is a dream come true!"
But her dream has become a nightmare for New York-based Pepsico Inc. In a marketing mistake that must rank among the world's worst, Pepsi had announced the wrong number. Instead of a single 1 million-peso winner, up to 800,000 bottle caps marked 349 had been printed. And tens of thousands of Filipinos soon began demanding billions of dollars that Pepsi refuses to pay.
The dispute - on which Pepsi has spent millions of dollars - has sparked a Cola War, Philippine-style. Pepsi records show that at least 32 delivery trucks have been stoned, torched or overturned. Armed men have thrown Molotov cocktails and homemade bombs at Pepsi plants and offices.
In the worst incident, police say a fragmentation grenade bounced off a parked Pepsi truck in a Manila suburb Feb. 13 and killed a schoolteacher and a 5-year-old girl and wounded six other people.
Pepsi executives in Manilla have gotten so many death threats they use round-the-clock bodyguards and vary office hours and travel. Heavily armed guards ride shotgun on Pepsi trucks. The company has withdrawn all but two expatriates, leaving an official in charge who has experience in Beirut.
And suing Pepsi has become the choice of a new generation. Criminal and civil claims filed against Pepsi across the Philippines far outnumber those against the late President Ferdinand Marcos and his wife, Imelda, who are accused of looting up to $10 billion during their reign.
At last count, more than 22,000 people have filed 689 civil suits seeking damages from Pepsi, plus more than 5,200 criminal complaints for fraud and deception, the company says.
Only a handful of trials have begun, but the nation's appeals court this month upheld arrest orders against 10 local Pepsi executives. The company has appealed, and no arrests have been made.
Even more remarkably, in a country crippled by daily electric blackouts, endemic corruption and poverty that is among the most pervasive in Asia, the only protests that regularly draw angry crowds into the streets are those against Pepsi.
In ways the government never could, the anti-Pepsi fever has brought together Communist rebels and army generals, well-dressed Manila matrons and barefoot rural peasants. All hold 349 caps.
"This has united the people. . . . Pepsi has cheated the Philippine people," Bhambi Santos, an anti-Pepsi activist and evangelist, bellowed into a bullhorn at a recent rally of several hundred banner-waving, drum-beating people in Manila's high-rise business district.
The protest ended abruptly moments later when a rock tossed from the crowd smashed a window in the government's trade and industry office, which had approved the Pepsi promotion.
Kenneth Ross, spokesman for Pepsi-Cola International, which owns 19 percent of the local bottling company, said the company's position is clear. "We will not be held hostage to extortion and terrorism," he said in a telephone interview from Purchase, N.Y. "And that's exactly what we have faced in the Philippines in the last year."
But unlike Pepsi's cool crisis management in the United States after false reports spread that syringes were found in Pepsi cans, company officials here panicked. When mobs rioted after the bottle-cap error was announced, frightened executives decided at a predawn meeting to offer $20 in pesos to anyone with a 349 cap.
"They made two mistakes," said one official, who like all local Pepsi employees asked not to be identified. "You should never make a decision at 3 a.m. And they thought it was a few thousand people at most."
To their horror, at least 486,170 cap-holders already have flooded in. Pepsi, which had budgeted only $2 million for prizes, had to pay $10 million more for what it calls a "goodwill gesture." It also agreed to pay $6,000 to the government's consumer protection bureau, the maximum penalty under the law.
"We have done everything that we think is reasonable to amicably conclude this issue," said Ross, who has refused to explain how the bottle-cap mistake occurred. "At this point, we do not intend to lay out additional money."
But Pepsi is clearly worried. A telling sign: In this basketball-crazed culture, the company changed the name of its professional team from the Pepsi-Cola Hotshots to the 7-Up Uncolas.
More important, Pepsi President Christopher Sinclair flew to Manila in early April for an unannounced meeting with Philippine President Fidel Ramos. A Ramos aide said that Sinclair pleaded for help, warning that the fiasco could harm government efforts to lure much-needed foreign investment.
But Ramos told the Los Angeles Times that he does not think Pepsi's predicament will discourage other investors. "It's a special kind of case," he said.
Thousands have joined anti-Pepsi organizations such as Coalition 349.
One, 64-year-old Paciencia Salem, wilted in Manila's steam-bath heat one recent afternoon at an anti-Pepsi protest. Her husband, she said, died of heart failure after a similar rally last year. She said she is prepared to do the same.
"Even if I die here, my ghost will come to fight Pepsi," she promised. "It is their mistake. Not our mistake. And now they won't pay. That's why we are fighting."
by CNB