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Coca-Cola in China Probe After Child’s Death

Patti Waldmeir in Shanghai

Coca-Cola, the world’s largest soft-drink maker, is co-operating with Chinese authorities in their investigation of the death of a child whom state media said fell ill after consuming one of Coke’s popular Minute Maid milk beverages in northern China.

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Coke, which is one of the leading drinks brands in China, said it was taking the incident very seriously and had removed the product from shelves in Jilin province, but had tested the product line and found no problems.

“After we were notified of this incident, we carried out comprehensive internal reviews of the retention samples of the same production batches and have not found anything unusual,” it said. “All the products are safe and within standards.”

The death, which was reported on Wednesday, generated thousands of comments on Sina Weibo, the Chinese equivalent of Twitter. Concern about contaminated food and other product quality issues is high on the list of explosive political issues in China.

Foreign brands are held to a high standard in matters of food quality, and news of contamination can be harmful to their reputation. Walmart recently came under fire in the Chinese press – and was fined 2.7 million yuans ($423,000) – after it was accused of relabelling regular pork as organic in some stores in south-western China.

Johnson & Johnson, the consumer products company, attracted Chinese public criticism recently after consumer advocates complained that the company was to phase out potentially harmful chemicals from its baby shampoo later in China than in some other countries.

Coke has been investing heavily in China, but has faced some obstacles recently. Last summer, the company had to recall Coke Zero fountain syrup from Taiwan after it surfaced that the drink contained a banned preservative that is said to cause health problems. In 2006, the company had to defend itself against claims that its products in China contained high levels of benzene, a chemical that has been shown to cause cancer.

But very few of the Weibo comments about the Coke incident blamed the famous drinks brand. Most Weibo comments appeared to assume that the poisoning was deliberate and not the result of a lapse in quality control by Coke. One Chinese news report said the drink had been contaminated with pesticide.

“This case does not involve a product quality issue, and government authorities are carrying out detailed investigations at this time,” said Coke.

Most Weibo users appeared satisfied by this reassurance from Coke that most of its products are not affected, but the Food Safety Commission in Changchun, where the incident took place, warned residents not to consume the drink involved – Meizhiyuan strawberry drink – for the next few days. One Weibo user commented: “If even Coke is toxic, then which food and beverage [brand] is safe?”

Most industry analysts said they doubted the issue would have a long-term effect on Coke in China. Jason Yuan, retail analyst with UOB Kay Hian Holdings, said the full impact could not be assessed before the investigation had finished, but added that “if it is only one or two bottles, it won’t influence Coke’s reputation”.

Shaun Rein of China Market Research in Shanghai said Coke’s sales of dairy drinks in the north could suffer in the short term but added, “I doubt it will have a long-term impact. People trust the brand on quality control.”

Coke shares were flat in midday trading in New York on Thursday.

Additional reporting by Alan Rappeport in New York

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