Coca-Cola suffers brand damage due to quality problems in China

The survey, conducted by China Association for Quality and China National Customer Committee this month, showed that among the 12 mainstream brands, domestic beverage brands Nongfu Spring, Wong Lo Kat and Wahaha all received above-average scores of 72.4 or more. Coca-Cola scored the lowest at 69.3 points.

In the same survey two years ago, Coca-Cola ranked sixth among the 12 brands. Although the international beverage giant still maintains relatively high market share in China, repeated quality incidents appear to have severely damaged Chinese consumers’ trust in Coca-Cola.

In April this year, several batches of Coca-Cola Shanxi Beverages Company’s products were found contaminated with chlorine. However, the company claimed they posed no threat to human health and refused to recall the contaminated products.

Earlier, a March statement by a US consumer protection organisation said that soda drinks produced by Coca-Cola and PepsiCo contained high levels of 4-methylimidazole, a known animal carcinogen.

Coca-Cola announced later that it would solve the problem, but it was criticised for adopting double standards, as it only planned to improve the production process in US factories.

“As a global brand, Coca-Cola should have the same international standard system,” said Peter Mack, executive director of marketing for Greater China at Landor Associates. “Also, the public relations issue could be another possible reason for brand damage. The PR should be honest with the problems and figure out how to fix them as soon as possible.”

Coca-Cola did not reply directly to questions about the above incidents, instead citing double-digit growth in the Chinese market in 2011 and a Millward Brown survey in June that placed Coca-Cola in the top position among 25 brands in nine categories including "Is a brand I love", "Is a brand leader" and "Is a brand I trust".

The China Association for Quality and China National Customer Committee survey also indicated changes in consumer attitude, indicating that today’s Chinese consumers tend to choose functional beverages because of their increasing awareness of nutrition, health and drinks safety. Soft drinks are enjoying less favour.

“Chinese consumers have become more health conscious," Mack said. "Their preference for mineral water, tea and juice shows a change in consumption habits. Some leading local brands have built better business acumen and become more sophisticated. Their increasing quality has led them to the top of the rankings.”

The complete ranking from the survey is as follows:

• Nongfu Spring
• Wong Lo Kat
• Wahaha
• He Qi Zheng
• PepsiCo
• Jiu Long Zhai
• Lu Lu
• Uni-President
• Master Kong
• Robust
• Hui Yuan
• Coca-Cola