Federal prosecutors are demanding details of a marketing test allegedly rigged by Coca-Cola executives.
A federal grand jury has issued a subpoena to Burger King, which conducted the experimental promotion with Coke in March 2000. The burger behemoth said it would comply with the request for records relating to the scandal.
The test involved BK’s Richmond (Virginia) outlets giving away coupons with value meals for a free slushy drink called Frozen Coke. Executives from the drinks titan reputedly paid an external consultant to buy thousands of value meals and make the experiment appear successful.
The accusations came to light in a lawsuit alleging massive accounting and marketing fraud filed by ex-Coke executive Matthew Whitley [WAMN: 21-May-03]. An independent investigation ordered by Coke found no evidence to support most of the claims, but confirmed the rigging of the Richmond test [WAMN: 19-Jun-03].
Coke recently agreed to pay $10 million (€8.85m; £6.20m) to BK to settle the matter, but the ongoing federal probe means the Frozen Coke fiasco may yet come back to haunt the beverage giant. The subpoena is a sign that prosecutors, having launched an inquiry into Whitley’s claims last month, have decided to make the Richmond promotion their focus.
Data sourced from: The Wall Street Journal Online; additional content by WARC staff