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Pepsi Number Fever

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Pepsi Number Fever
The logo for the sales promotion.
DateFebruary – May 25, 1992
LocationPhilippines
Also known as349 incident
TypeSales promotion likely as part of the Cola Wars
OutcomeMarket share of Pepsi in the Philippines initially increased from 19.4% to 24.9%. Mistake in ₱1 million grand prize winning bottle cap distribution led to riots and deaths.
Deaths5

The Pepsi Number Fever,[1] also known as the 349 incident,[2] was a promotion held by PepsiCo in the Philippines in 1992, which led to riots[3] and the deaths of at least five people.[4]

It also existed in Poland in 1995, known as Numeromania, and the person announcing the winning numbers was Piotr Fronczewski.[citation needed] However, it didn't cause as much controversy.

Promotion

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In February 1992,[2] Pepsi Philippines (PCPPI) announced that they would print numbers, ranging from 001 to 999,[5] inside the caps (crowns) of Pepsi, 7-Up, Mountain Dew and Mirinda bottles. Certain numbers could be redeemed for prizes, which ranged from 100 pesos (about US$4) to 1 million pesos for a grand prize, roughly US$40,000 in 1992,[6] equivalent to 611 times the average monthly salary in the Philippines at the time.[7]

Pepsi allocated a total of US$2 million for prizes.[4] Marketing specialist Pedro Vergara based Pepsi Number Fever on similar, moderately successful promotions that had been held previously in Vergara's geographic area of expertise, Latin America.[8]

Pepsi Number Fever was initially wildly successful, and increased Pepsi's monthly sales from $10 million to $14 million and its market share from 19.4% to 24.9%.[7] Winning numbers were announced on television nightly. By May, 51,000 prizes had been redeemed, including 17 grand prizes,[6] and the campaign was extended beyond the originally planned end date of May 8 by another 5 weeks.[7]

Incident

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On May 25, 1992, the ABS-CBN evening news program TV Patrol announced that the grand prize number for that day was 349.[9] Grand prize-winning bottle caps were tightly controlled by PepsiCo. Two bottles with caps with that day's winning number printed inside of them, as well as a security code for confirmation, had been produced and distributed.[4] However, before the contest was extended to add new winning numbers,[7] 800,000 regular bottle caps had already been printed with the number 349, but without the security code.[3][6] Theoretically, these bottle caps were cumulatively worth US$32 billion.[4]

Thousands of Filipinos rushed to Pepsi bottling plants to claim their prizes.[10] PCPPI initially responded that the erroneously printed bottle caps did not have the confirmation security code, and therefore could not be redeemed.[3][6] Newspapers the next morning announced that the winning number was in fact 134, adding to the confusion.[7] After an emergency meeting of PCPPI and PepsiCo executives at 3:00 a.m. on the 27th,[6] the company offered 500 pesos ($18) to holders of mistakenly printed bottle caps, as a "gesture of good will".[11][12] This offer was accepted by 486,170 people, at a cost to PepsiCo of US$8.9 million (240 million pesos).[13]

Protests

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Many irate 349 bottle cap holders refused to accept PCPPI's settlement offer. They formed a consumer group, the 349 Alliance, which organized a boycott of Pepsi products, and held rallies outside the offices of PCPPI and the Philippine government. Most protests were peaceful, but on February 13, 1993, a schoolteacher and a 5-year-old child were killed in Manila by a homemade bomb[7] thrown at a Pepsi truck.[14] In May, three PCPPI employees in Davao were killed by a grenade thrown into a warehouse.[15]

PCPPI executives received death threats, and as many as 37 company trucks were overturned, stoned or burned.[6] One of the three men accused by the NBI of orchestrating the bombings claimed they had been paid by Pepsi to stage the attacks, in order to frame the protesters as terrorists.[7] Then-senator Gloria Macapagal Arroyo suggested that the attacks were being perpetrated by rival bottlers attempting to take advantage of PCPPI's vulnerability.[6] The Philippine Senate's Committee on Trade and Commerce accused Pepsi of "gross negligence" and noted that it was involved in a similar fiasco in Chile just a month before the 349 incident.[16]

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About 22,000 people took legal action against PepsiCo. At least 689 civil suits and 5,200 criminal complaints for fraud and deception were filed.[1] In January 1993, Pepsi paid a fine of 150,000 pesos to the Department of Trade and Industry for violating the approved conditions of the promotion.[7] On June 24, 1996, a trial court awarded the plaintiffs in one of the lawsuits 10,000 pesos (about US$380[17]) each in "moral damages".[13]

Three dissatisfied plaintiffs appealed, and on July 3, 2001, the appellate court awarded these three plaintiffs 30,000 pesos (about US$570[18]) each, as well as attorneys' fees.[13] PCPPI appealed against this decision. The suit reached the Philippines Supreme Court, which in 2006 ruled that "PCPPI is not liable to pay the amounts printed on the crowns to their holders. Nor is PCPPI liable for damages thereon",[13] and that "the issues surrounding the 349 incident have been laid to rest and must no longer be disturbed in this decision."[2]

Legacy

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To commemorate the promotion, the Ig Nobel Prize, a spoof of the Nobel Prizes organized by the Massachusetts Institute of Technology's Journal of Irreproducible Results, awarded its 1993 Peace prize to PCPPI for "bringing many warring factions together for the first time in their nation's history."[19]

In the immediate aftermath of the scandal, sales of Pepsi products in the Philippines plunged to 17% of the total market share but recovered to 21% by 1994.[6]

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The incident is discussed in the 2022 Netflix documentary Pepsi, Where's My Jet? as a precedent in the Leonard v. Pepsico, Inc. lawsuit in the United States that also involved purportedly false advertising by Pepsi.[20]

See also

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References

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  1. ^ a b Drogin, Bob (26 July 1993). "Pepsi-Cola Uncaps A Lottery Nightmare -- Bombings, Threats Follow Contest With Too Many Winners". Los Angeles Times. Archived from the original on 7 September 2015. Retrieved 9 October 2015.
  2. ^ a b c "SC decides in finality on 'Pepsi 349' case". The Philippine Star. 26 June 2006. Archived from the original on 13 April 2019. Retrieved 13 June 2020.
  3. ^ a b c Mickolus, Edward F.; Simmons, Susan L. (1997). Terrorism, 1992-1995: A Chronology of Events and a Selectively Annotated Bibliography. ABC-CLIO. p. 166. ISBN 978-0-313-30468-2. Archived from the original on 14 October 2023. Retrieved 21 June 2020.
  4. ^ a b c d Kernan, Sean (12 June 2020). "Pepsi's $32 Billion Typo Caused Deadly Riots". Medium. Archived from the original on 9 June 2020. Retrieved 13 June 2020.
  5. ^ Asiaweek, Volume 20. Asiaweek Limited. 1994. p. 47. Archived from the original on 14 October 2023. Retrieved 21 June 2020. {{cite book}}: |work= ignored (help)
  6. ^ a b c d e f g h "The Computer Error That Led to a Country Declaring War on Pepsi". mentalfloss. 27 September 2018. Archived from the original on 28 September 2018. Retrieved 13 June 2020.
  7. ^ a b c d e f g h "Number Fever: The Pepsi Contest That Became a Deadly Fiasco." Bloomberg Businessweek, August 4, 2020. Archived version.
  8. ^ White, Michael (2002). A Short Course in International Marketing Blunders: Mistakes Made by Companies that Should Have Known Better. World Trade Press. p. 100. ISBN 978-1-885073-60-0. Archived from the original on 14 October 2023. Retrieved 20 June 2020.
  9. ^ "Rage, Riots, and Death: Looking Back at the Pepsi 349 Debacle". Esquire. 17 January 2022. Archived from the original on 10 October 2022. Retrieved 16 July 2023.
  10. ^ Teves, Oliver (29 July 1993). "A PEPSI GIVEAWAY, GONE WRONG". The Washington Post. Archived from the original on 29 May 2023. Retrieved 13 June 2020.
  11. ^ "COMPANY NEWS: An Unlucky Number; Pepsi Caps the Damages On a Promotion Gone Flat". The New York Times. 18 August 1993. Archived from the original on 17 January 2023. Retrieved 13 June 2020.
  12. ^ Asian Recorder. K. K. Thomas at Recorder Press. 1993. p. 23358. Archived from the original on 14 October 2023. Retrieved 14 June 2020.
  13. ^ a b c d "G.R. No. 150394". 26 June 2007. Archived from the original on 7 March 2019. Retrieved 13 June 2020.
  14. ^ "Blunder turns to anti-Pepsi fever as Filipinos demand their contest prizes". baltimoresun.com. Archived from the original on 23 August 2020. Retrieved 13 June 2020.
  15. ^ "Botched Cap Promotion Haunts Pepsi". The Phnom Penh Post. Archived from the original on 13 September 2013. Retrieved 13 June 2020.
  16. ^ "A PEPSI GIVEAWAY, GONE WRONG". The Washington Post. 29 July 1993. Archived from the original on 29 May 2023. Retrieved 16 July 2023.
  17. ^ "XE Currency Table: PHP – Philippine Peso". XE.com. Archived from the original on 14 April 2021. Retrieved 7 July 2020.
  18. ^ "XE Currency Table: PHP – Philippine Peso". XE.com. Archived from the original on 6 September 2015. Retrieved 7 July 2020.
  19. ^ "Pepsi-Cola gets 'Ig Nobel Peace Prize'". UPI. 8 October 1993. Archived from the original on 2 October 2021. Retrieved 16 July 2023.
  20. ^ "'Pepsi, Where's My Jet?' docu-series review: An all-American pop rush that fizzles out in the end". The Hindu. 8 October 1993. Archived from the original on 25 December 2022. Retrieved 16 July 2023.
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