10 28 ;993 ---foreign news orthopaedic bedsfor two die in ... · after pepsi-cola bungled a sales...

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Page 1: 10 28 ;993 ---FOREIGN NEWS ORTHOPAEDIC BEDSFOR Two die in ... · after Pepsi-Cola bungled a sales campaign to make one oftheir customers a millionaire. Pepsi promised to pay one million

10 DAILY EXPRESS Wednesday July 28 ; 993 ***

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_---FOREIGN NEWS

Two die in greatcola prize fiasco

A GIRL of five and a teacherhave died in violencesweeping the Philippinesafter Pepsi-Cola bungled asales campaign to make oneof their customers amillionaire.

Pepsi promised to pay onemillion pesos - nearly £30,000 -tax free to the customer whobought a bottle with 349 on theunderside of the cap.

The slogan "Today, you couldbe a millionaire!" was advertisedeverywhere until executivesrealised 800,000winning bottletops had been printed.

The cost of honouring: thepled~e was put at £24 billion, sothe firm offered £ 15 instead toanyone with a 349 cap.

Barbed-wire barricades wereerected around Pepsi plants andoffices as mobs of "winners"charged the premises.

But when more than 486,170angry, customers arrived inManila by boat, bus and planefrom outer islands the firm haltedall payments.

Victoria Angelo, a "winner"who lives in one of Manila's

By PHILIP FINN

worst slums, had told herhusband and children: "We'remillionaires!"

She said: "I tell my children,you can finish school and go tocollege. I tell myself we can buy areal house. Can you imagine? Itwas a dream come true."

Several pensioners are alsobelieved to have died inanti-Pepsi riots.

Thirty-two delivery truckshave been stoned, torched oroverturned. Armed men havethrown Molotov cocktails andhome-made bombs at Pepsiplants and offices.

The child and the teacher diedwhen a grenade tossed at acompany truck bounced off into anearby crowd, wounding six.Armed bodyguards areprotecting Pepsi executives afterdeath threats.

Officials in the United Statesface years of litigation. More than689 civil suits, involving 22,000claimants, have been filed.

The company also faces 5,200criminal complaints for fraud anddeception. Pepsi-Cola

BOTTLINGOUT:Pepsi isrefusingto pay allwinners

International has paid an extra£7 million in prizes as "goodwill"and a maximum government fineof £4,500.

A spokesman for the companyin New York, said: "We will notbe held hostage to extortion andterrorism. We have doneeverything we think is reasonableto amicably conclude this issue."

300,000 flee assare

blitzed >by IsraelFromROBIN ADAMS

in Northern Israel

ISRAEL last nightvowed to create a newMiddle East exodus in abid to smash fanaticalMoslem terrorists.It unleashed the full might

of its forces on southernLebanon in a deliberate pol­icy to turn the Hezbollahstronghold into a wasteland.

More than 300,000 Lebanesehave already fled to Beirut afterscores of villages were given justhours notice of the bombardment.

Thousands of cars, their roofspiled high with mattresses andbelongings, jammed the road northas smoke rose above their homes.

MastermindAt least 14 people died yesterday,

taking the toll for the three-dayblitz to 53. And almost 300 weresaid to have been injured in theonslaught.

Despite the bombardment Hez­bollab continued to launch Katyu­sha rockets across the border. Theykept 150,000 Israeli civilians pinneddown in concrete bunkers.

The Israeli attacks risk puttingtheir troops in line for directconfrontation with 35,000 Syriansoldiers in the Lebanon.

In Damascus, the governmentcontrolled AI-Baath paper warnedthe action was placing the MiddleEast "on the doorstep of war".

But Israeli prime minister YitzhakRabin - mastermind of the Six DayWar in 1967 - said the Lebaneserefugees were legitimate weapons inthe battle to crush Hezbollah.

He told MPs he planned to flood

WOUNDED: A medic treats a Lebanese victim yesterday Picture: SSCBeirut with evacuees to pressurethe government into controlling theIranian-backed guerrillas.

He added: "If there is no quiethere, there won't be quiet for theresidents of south Lebanon north ofthe security zone."

Nabatiyeh was a virtual ghosttown after its 15,000 inhabitantsfled just in advance of an Israelibombardment of 20 shells a minute.

Meanwhile President Clintonstepped up a diplomatic campaignto contain the conflict and keeppeace talks alive.

"I think the Syrians have shown

commendable restraint so far," hesaid. "I don't think we should letHezbollah and all these groups thatdon't want anything to happen inthe Middle East derail the peaceprocess."

U.S. Secretary of State WarrenChristopher cut short a visit toAsia, returning to Washington todiscuss a Middle East trip he hadplanned next week to revive talks.

He spoke by telephone withRabin, Syrian Foreign Minister Far­ouk Sharaa, and Lebanese primeminister Rafik Hariri, after a crisismeeting of the. Lebanese cabinet.

Page 2: 10 28 ;993 ---FOREIGN NEWS ORTHOPAEDIC BEDSFOR Two die in ... · after Pepsi-Cola bungled a sales campaign to make one oftheir customers a millionaire. Pepsi promised to pay one million

I

doch was thought to be in considerable fi­nancial trouble, and his coup in acquiringSTAR came as a mild shock to many ob­servers who had counted him out as adealmaker. From a base consisting of twonewspapers in Adelaide, Murdoch hadbuilt a media conglomerate that includedthe 20th Century Fox movie studio, Amer­ica's Fox TV network and three of the larg­est-circulation dailies in London. A reces­sion and cash-flow problems in 1990caused Murdoch to pile up debts as high as$8 billion and forced him into a fire sale ofsuch assets as the magazines Seventeen,New York and Premiere and the newspaperthe Chicago Sun-Times. Many analystsconsidered News Corp. to be only one ortwo steps away from insolvency.

Murdoch managed to dodge bankrupt­cy by repackaging News Corp.'s debt.Now, with the company's stock up morethan threefold since 1991, bankers areonce again queuing up to lend him money.Last month News Corp. paid $408 millionfor a 15% stake in one of Australia's big­gest commercial TV networks. In JuneMurdoch sought to enter the Asian TVmarket by paying $240 million for a 22%share in Sir Run Run Shaw's TelevisionBroadcast Ltd., the owner of two over-the­air stations in Hong Kong. The deal wasunplugged by the Chinese government,which is scheduled to assume sovereigntyover Hong Kong in 1997 and has opposedforeign purchases of the colony's media.Murdoch also re-acquired the New YorkPost in July for $25 million. Says LouisNiederer, an analyst at Bain Securities:"With the STAR TV deal, Murdoch is re-es­tablishing his global strategy."

The STAR buyout was negotiated byMurdoch and Richard Li, 26, son of HongKong billionaire Li Ka-shing. Murdoch ap­proached the family several months agowith an offer of $425 million, but the talkslapsed when the price was rejected as toolow. Murdoch renewed his overtures justas Pearson PLC began to make a seriousbid. The discussions reached a crucialstage a few weeks ago when young Li flewto Corsica to meet Murdoch. While cruis­ing in the Mediterranean aboard Mur­doch's yacht, the two spent six hours hag­gling over the deal. After they agreed on aprice of $525 million, Li flew back to HongKong. Early the next morning, as he andhis team were scanning the stock reportsto see how their new shares of News Corp.were doing, Li received an urgent call. "Itwas K.S.," Li recalls, referring to his fa­ther. "He said, 'This looks like a good deal.Let's take it.' " Humbly, but with bemuse­ment, the son replied, "Yeah, we will."

The result: the Li family made sixtimes its original investment, and RupertMurdoch locked himself into the risingfortunes of the Asian middle class, whichis now, by anyone's measure, the most up­wardly mobile group in the world. -Withreportingby SandraBurton/HongKong

i

i

Ij

F OR MONTHS GINA CRUZ, A MANILAgrandmother, played Pepsi Cola's"Numbers Fever" promotion lottery,

buying several bottles a day and saving thecaps, in the hope that one of the numbersimprinted inside them would win her a1 million peso ($40,000) prize. When themagic number, 349, was announced inMay 1992, Cruz was overjoyed to find shehad not one, but two caps bearing the win­ning digits. She promptly fainted. "Myblood pressure shot up," she explained lat­er, "probably fromdrinking too muchPepsi." Then shelearned that her sonalso had a 349 cap­and she nearly col­lapsed again.

Cruz's indigna­tion after discoveringthe next day that shewas not, after all, adouble millionaire, isshared by thousandsof contestants whofeel equally cheated.Instead of markingout 18 winning num­bers, on which Pepsihad planned, a com- Taking it to the streets: 349 protesters in Manilaputer had wronglygenerated 800,000. The company ex­plained that it simply did not have the $32billion it would take to pay all claimants.The real winners, it said, would be identi­fied by a security code that had beenplaced on caps; the losers were offeredapologies.

When Pepsi's explanation was not ac­cepted, a promotion that initially boostedthe company's market share 5% turnedinto a nightmare. The winners felt like los­ers of a second, surprise lottery: the secu­rity code had been publicized as an au­thentication tool, not as a necessarysecond winning number. Feeling hood­winked, the players have banded togetherin protest groups, fanning anti-Pepsiflames at frequent demonstrations andmarches. More than 22,000 people holdingthe 349 number have filed 689 civil suitsseeking damages, as well as 5,200 crimi­nal complaints alleging fraud and decep­tion. Some Pepsi employees have received

MARKETING

NUMBERSFEVERA $32 billionbungle byPepsi hasfuriousFilipinosall fizzed up

death threats and now change their dailyroutines to avoid being attacked. Explo­sives have been thrown at Pepsi plants andoffices, and 37 of the company's deliverytrucks have been stoned, overturned orset on fire. In the worst incident, a school­teacher and a five-year-old girl were killedlast February when a grenade pitched at aPepsi truck bounced off and exploded infron t of a store.

Many argue that because Pepsi dan­gled the promise of quick riches in a poorcountry, it is responsible for the violence.There is sympathy, for instance, for thefamily who sold everything to finance atrip to Manila to collect the prize they be­lieved they had won. "It's such a letdown,"says Dionisia Ayon. "Pepsi doesn't havethe right to play with people's emotions."A particularly embittered 34ger, slumdweller Ariel Salamante, claims to be seri­ously considering enlisting in the Commu­nist New People's Army, to join its "armedstruggle against multinational leecheslike Pepsi."

Early in the contretemps, after an iratethrong rioted and stoned Pepsi's plant in

TIME,AUGUST9,1993

Manila, the company offered a 500-peso($20) "goodwill" prize to all holders ofsham 349 caps and paid out $10 million inthe process, five times the original promo­tion budget. The company says half a mil­lion customers have accepted the consola­tion money, yet sales remain "soft." Pepsiexecutives describe the protesters as un­reasonable opportunists egged on by con­artist ringleaders. "Our intent was nevermalicious," says Pepsico Internationalspokesman Kenneth Ross. "I don't think[they] can make the same claim."

While a pro-Pepsi ruling by the JusticeDepartment has undermined the basis forcriminal cases, the affair is far from over. ASenate Trade Committee report this monthfaults the company for "gross negligence"and "misleading or deceptive advertising."Gina Cruz concurs. "I'm back at squareone," she says. "I've never felt so short­changed in my life." -By TamalaM. Edwards.With reportingbyNellySindayen/Manila

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