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Botched Cap Promotion Haunts Pepsi

Botched Cap Promotion Haunts Pepsi

MANILA (AP) - A bizarre twist in a Pepsi promotional campaign to make millionaires

out of poor Filipinos has turned into a battle between tens of thousands of consumers

and the American soft drink giant.

Pepsi launched its "number fever" promotions last year, promising instant

cash of up to 1 million Pesos-about U.S. $37,000-for those who held bottle caps with

three-digit winning numbers.

The controversy erupted after the company announced May 25, 1992, the winning number

for that day-349. Thousands of people rushed giddily to Pepsi plants across the country

to collect. But the company refused to give them their prizes, saying the caps did

not have the right security number.

Winners complained, saying the promotional materials did not say a "winning"

security code was needed as well, only that a security number determined the authenticity

of the cap.

In what it called a "goodwill gesture," Pepsi agreed to pay U.S. $18 each

to anyone holding one of the 80,000 349 caps. It compensated about a half million

people for a total of U.S. $10 million.

Since then, irate winners have rioted at some of the plants while others attacked

bottling plants and delivery trucks with grenades and firebombs. At least 37 trucks

have been burned in such attacks and a bottling plant in Davao city in the south

has stopped operation because of grenade damage.

A teacher and 5-year-old girl died when a grenade lobbed at a truck bounced off and

exploded near a crowd on a street. Also in Davao, one Pepsi supervisor and two employees

reportedly were killed in a separate grenade attack.

The Senate Committee on Trade and Commerce accused Pepsi of "gross negligence"

and said it distributed "misleading and deceptive" advertisements "by

changing the rules of the game." It noted that Pepsi was involved in a similar

fiasco in Chile just a month before the 349 incident.

Pepsi blames the flap on "a computer software glitch"-the inadvertent printing

and circulation of hundreds of thousands of additional 349 caps, albeit ones without

"winning" security codes.

"It's a horribly unfortunate situation. But there was no attempt on Pepsi's

part to deceive anybody....and we acted very quickly and very aggressively to correct

the mistake," said Kenneth Ross, a spokesman for Pepsi-Cola International, the

International Beverage Division of PepsiCo Inc.

Unswayed, one of eight groups of winners is pressing a criminal fraud and swindling

suit against Pepsi. Arraignment and trial have been postponed pending a Pepsi petition

for reinvestigation.

"What makes people so furious and determined to fight on is that hopes had been

raised but were immediately crushed," said Ferdinand Eslabon, president of the

group, which calls itself the United 349. He said an alliance of all contest "winners"

will campaign for a boycott of Pepsi.

Pepsi has moved to dismiss all criminal cases in the wake of a January ruling by

the Philippines Department of Justice that there was no basis for criminal charges

against the company for its handling of the promotion.

Nationwide, about 50,000 349 cap-holders have been organized. "A few local opportunists,

quick-buck artists, have lured thousands of unwitting Filipinos with very empty promises

of a huge settlement in the future for the payment of an up-front fee," said

Ross.

Franklin Valenzuela, 29, said his ambition to resume his computer studies was revived

when he got a 1 million-Peso 349 cap. He has quit his job as a messenger and sent

his wife and three daughters to the province so he could devote his time to pursue

his claim.

"We hope other multinationals will not follow Pepsi or we will be forced to

drive them all out of out country," Valenzuela said.

Vic Del Fierro, president of the coalition 349 group of cap-holders, is a professional

congressional lobbyist whose family has three 1 million-Peso caps. He said he plans

to rally support from consumer groups in Europe and the United States, where he was

headed this week in hopes of also talking with PepsiCo officials.

Del Fierro is pursuing an amicable settlement that would involve awarding 50 percent

of the prize to all 349 cap-holders and the remaining 50 percent as a "Pepsi

bond" redeemable in five years.

Pepsi, Ross said, will not meet with any representatives of such groups "as

long as an environment of threats and violence persists."

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