The Computer Error That Led to a Country Declaring War on Pepsi

iStock
iStock

On May 25, 1992, the Channel 2 News program in Manila, Philippines aired a segment that had been running since February of that year. Each night, the station alerted viewers to the day’s winning number in Pepsi’s Number Fever promotion. Buying a specially marked Pepsi product allowed consumers to match the number underneath the bottle cap to the announcements. While most prizes were just 100 pesos (roughly $5 in today’s U.S. currency), there was an opportunity to win the grand prize of one million pesos, or the equivalent of $37,000 to $40,000.

The Philippines was a country struggling with a modest economy and widespread poverty, and that grand prize was perceived as a life-changing amount of money. So when 349, that night's winning number, flashed on screen that night, tens of thousands of Filipinos couldn’t believe their luck. The number was associated with the largest prize in the sweepstakes. The next morning, Pepsi plants in Manila were overrun by people toting their 349-emblazoned bottle caps and looking for the promised reward.

There wasn’t one.

Only two of the grand prizes were supposed to have been doled out. Instead, Pepsi had somehow manufactured 800,000 caps with the winning number. Consumers were told the company had made an error and were turned away in droves. Barbed wire was erected around the plants. Riots, boycotts, and picketing ensued. Homemade bombs were launched at bottling factories. In the words of one Pepsi executive, “we had death threats for breakfast.”

The giveaway was intended to boost sales. Instead, Pepsi executives were not only bleeding market share—they were suddenly in fear for their lives.

 

As the perennial number two in the cola industry, Pepsi had engaged in several promotional attempts over the years to compete with rival Coca-Cola. In 1989, they marketed Pepsi A.M. as an alternative to coffee. (It had 28 percent more caffeine than regular Pepsi.) The product didn’t catch on, nor did the company’s expensive attempt to recruit pop star Madonna that same year. Stung by controversy over her religious-themed “Like a Prayer” video, the company pulled advertising featuring the singer despite having paid her $5 million for the endorsement.

Their Number Fever campaign didn’t appear to carry the same risks. Pepsi saw only upside: In the Philippines, then the world's 12th largest market for soft drinks, the company was a distant second to Coca-Cola. The promise of winning anything from a modest amount of money to 1 million pesos was enough to spike sales 40 percent, capturing 26 percent of the country’s market share. From February to May, 51,000 people had won 100 pesos, while 17 had captured the grand prize.

To determine winning numbers, Pepsi recruited D.G. Consultores, a marketing firm based in Mexico. The numbers were generated via computer, then secured in a safe deposit box in Manila. From there, the list would be used to “seed” bottle caps in the bottling plants. Each night, the company would announce the day’s winning number on television.

A Pepsi bottlecap is pictured against a blue background
iStock

Somehow, that system went awry. A computer glitch told bottlers to print 800,000 caps with the 349 designation, although all of them except for two lacked a special security code that proved the cap was authentic. That detail was irrelevant to consumers, who saw that they had the number and proceeded to demand the prize they felt was owed to them—a number that eventually grew to 486,170 people. (Though more caps were printed, not everyone noticed they held a “winning” number.)

Quickly, Pepsi executives in the Philippines and stateside convened for an emergency meeting at 3 a.m. on how to proceed. Economically, honoring the perceived value of all of the caps was virtually impossible to justify—it would’ve cost the company tens of billions of dollars. Instead, they opted to declare it a computer error and offered $18 to $20 to cap holders as a “goodwill gesture.” What was originally earmarked to be a promotion with $2 million in total prizes ballooned to $10 million.

While some accepted the prize, most consumers were livid. Pepsi, they argued, had raised the hope of lessening their financial burdens. They didn’t care about a clerical mistake. Pepsi was a massive conglomerate and should accept fault.

The company disagreed, and that's when the trouble began.

 

Pepsi delivery trucks became an early and frequent casualty of the war on the soft drink manufacturer. Between 32 and 37 trucks were overturned, burned, stoned, or otherwise vandalized by protestors, many of whom took to the streets with signs and bullhorns to voice their displeasure over the company's wrongdoing. Corporate Pepsi offices were targeted by Molotov cocktails, makeshift explosives that crashed into windows and front lawns. One homemade grenade intended for a truck kept rolling and landed near a schoolteacher, killing her and a 5-year-old student and wounding six others.

Fretful Pepsi executives hired bodyguards, armed passengers in delivery trucks, and pulled expatriates from the country, leaving just a handful—including one with experience in Beirut—to face the angry mobs, which were quickly becoming organized. Several spun off into factions, including Coalition 349, which took a systematic approach to shaming Pepsi into paying up. After electing a leader, Vicente del Fierro Jr., they printed anti-Pepsi tracts and called for product boycotts. Paciencia Salem, a then-64-year-old protestor whose husband died of heart failure while marching in opposition, declared that the company would never see relief.

“Even if I die here, my ghost will come to fight Pepsi,” she said. “It is their mistake. Not our mistake. And now they won’t pay. That’s why we are fighting.”

Protestors voice anti-Pepsi sentiment during a rally in Manila
Romeo Gacad, AFP/Getty Images

Though Pepsi was reticent to respond to these impassioned revolts, calling it “extortion,” they were compelled to answer questions from the Philippines government. Senator Gloria Macapagal Arroyo called the mistake “negligent,” while thousands of civil and criminal complaints flooded state prosecutor offices. A crop of “speculators” even offered to buy the caps for $15, betting that the company might one day relent and agree to pay the full prize amount.

The tumult stretched well into 1993, at which point a sensational new twist captured local headlines. In December of that year, a police officer filed a report alleging that the bombings and riots were not the result of protestors. They were, he insisted, deliberate acts of self-sabotage by Pepsi against itself.

The accusation, which was reported in the Chicago Tribune, came from Artemio Sacaguing, chief of the organized crime division of the country’s National Bureau of Investigation. In his brief, Sacaguing reported to Manila prosecutors that a man had confessed to being a Pepsi security guard and knew of three mercenaries who were hired by the company to damage their property. In doing so, Sacaguing claimed, they could portray the anti-Pepsi groups as being violent and labeled as terrorists, harming their position in court.

Almost immediately, Sacaguing’s superiors dismissed his accusations and stated that the official’s report had already been discredited. A Pepsi lawyer refuted the allegation; Senator Macapagal Arroyo floated a slightly more plausible theory. Rival bottlers, she said, were acting out in order to weaken Pepsi’s grip on the market.

 

Slowly, Pepsi’s black eye in Manila began to fade. Most of the civil suits (689) and criminal complaints (5200) were tossed out of court. Sensing that the company had more determination to remain in the country than protestors had the time or energy to continue marching, the anti-Pepsi sentiment began to dim. By 1994, their market share had rebounded from a low of 17 percent post-scandal to 21 percent. A 1.5 liter “mega bottle” was a brisk seller.

In 2006, a Philippines Supreme Court ruling closed the book on the outstanding court cases and potential liability, finding that Pepsi was not obligated to honor the sweepstakes payout due to the error. It was a prolonged, if satisfactory, conclusion to the controversy.

Soda companies continue to perpetuate giveaways as a method for raising awareness, though there’s always risk that consumers want to push the envelope. In 1996, Pepsi offered prizes for people who collected points based on product purchases. One ad facetiously offered a Harrier fighter jet to anyone who submitted 7 million points. John Leonard, a 21-year-old business major, decided to take the company up on their offer to buy points for $.10 each. After raising $700,000, he demanded his jet, but Pepsi declared the prize offering was just a joke. A court agreed, granting summary judgment to the soda company. In future airings of the ad, they increased the number of points needed from 7 million to 700 million.

Wayfair’s Fourth of July Clearance Sale Takes Up to 60 Percent Off Grills and Outdoor Furniture

Wayfair/Weber
Wayfair/Weber

This Fourth of July, Wayfair is making sure you can turn your backyard into an oasis while keeping your bank account intact with a clearance sale that features savings of up to 60 percent on essentials like chairs, hammocks, games, and grills. Take a look at some of the highlights below.

Outdoor Furniture

Brisbane bench from Wayfair
Brisbane/Wayfair

- Jericho 9-Foot Market Umbrella $92 (Save 15 percent)
- Woodstock Patio Chairs (Set of Two) $310 (Save 54 percent)
- Brisbane Wooden Storage Bench $243 (Save 62 percent)
- Kordell Nine-Piece Rattan Sectional Seating Group with Cushions $1800 (Save 27 percent)
- Nelsonville 12-Piece Multiple Chairs Seating Group $1860 (Save 56 percent)
- Collingswood Three-Piece Seating Group with Cushions $410 (Save 33 percent)

Grills and Accessories

Dyna-Glo electric smoker.
Dyna-Glo/Wayfair

- Spirit® II E-310 Gas Grill $479 (Save 17 percent)
- Portable Three-Burner Propane Gas Grill $104 (Save 20 percent)
- Digital Bluetooth Electric Smoker $224 (Save 25 percent)
- Cuisinart Grilling Tool Set $38 (Save 5 percent)

Outdoor games

American flag cornhole game.
GoSports

- American Flag Cornhole Board $57 (Save 19 percent)
- Giant Four in a Row Game $30 (Save 6 percent)
- Giant Jenga Game $119 (Save 30 percent)

This article contains affiliate links to products selected by our editors. Mental Floss may receive a commission for purchases made through these links.

Good Gnews: Remembering The Great Space Coaster

Tubby Baxter and Gary Gnu in The Great Space Coaster.
Tubby Baxter and Gary Gnu in The Great Space Coaster.
YouTube

Tubby Baxter. Gary Gnu. Goriddle Gorilla. Speed Reader. For people of a certain age, these names probably tug on distant memories of a television series that blended live-action, puppetry, and animation. It was The Great Space Coaster, and it aired daily in syndication from 1981 to 1986. Earning both a Daytime Emmy and a Peabody Award for excellence in children’s programming, The Great Space Coaster fell somewhere in between Sesame Street and The Muppet Show—a series for kids who wanted a little more edge to their puppet performances.

Unlike most classic kid’s shows, fans have had a hard time locating footage of The Great Space Coaster. Even after five seasons and 250 episodes, no collections are available on home video. So what happened?

Get On Board

The Great Space Coaster was created by Kermit Love, who worked closely with Jim Henson on Sesame Street and created Big Bird, and Jim Martin, a master puppeteer who also collaborated with Henson. Produced by Sunbow Productions and sponsored by the Kellogg Company and toy manufacturer Hasbro, The Great Space Coaster took the same approach as Sesame Street of being educational entertainment. In fact, many of the puppeteers and writers were veterans of Sesame Street or The Muppet Show. Producers met with educators to determine subjects and content that could result in a positive cognitive or personal development goal for the audience, which was intended to be children from ages 6 to 11. There would be music, comedy, and cartoons, but all of it would be working toward a lesson on everything from claustrophobia to the hazards of being a litterbug.

The premise involved three teens—Danny (Chris Gifford), Roy (Ray Stephens), and Francine (Emily Bindiger)—who hitch a ride on a space vehicle piloted by a clown named Tubby Baxter. The crew would head for an asteroid populated by a variety of characters like Goriddle Gorilla (Kevin Clash). Roy carried a monitor that played La Linea, an animated segment from Italian creator Osvaldo Cavandoli that featured a figure at odds with his animator. The kids—all of whom looked a fair bit older than their purported teens—also sang in segments with original or cover songs.

The most memorable segment might have been the newscast with Gary Gnu, a stuffy puppet broadcaster who delivered the day’s top stories with his catchphrase: “No gnews is good gnews!” Aside from Gnu, there was Speed Reader (Ken Myles), a super-fast sprinter and reader who reviewed the books he breezed through. Often, the show would also have guest stars, including Mark Hamill, boxer “Sugar” Ray Leonard, and Henry Winkler.

All of it had a slightly irreverent tone, with humor that was more biting than most other kid’s programming of the era. The circus that Tubby Baxter ran away from was run by a character named M.T. Promises. Gnu had subversive takes on his news stories. Other characters weren’t always as well-intentioned as the residents of Sesame Street.

Off We Go

The Great Space Coaster was popular among viewers and critics. In 1982, it won a Daytime Emmy for Outstanding Individual Achievement in Children’s Programming—Graphic Design and a Peabody Award in 1983. But after the show ceased production in 1986, it failed to have a second life in reruns or on video. Only one VHS tape, The Great Space Coaster Supershow, was ever released in the 1980s. And while fan sites like TheGreatSpaceCoaster.TV surfaced, it was difficult to compile a complete library of the series.

In 2012, Tanslin Media, which had acquired the rights to the show, explained why. Owing to the musical interludes, re-licensing songs would be prohibitively expensive—potentially far more than the company would make selling the program. Worse, the original episodes, which were recorded on 1-inch or 2-inch reel tapes, were in the process of degrading.

That same year, Jim Martin mounted an Indiegogo crowdfunding campaign to try and raise funds to begin salvaging episodes and digitizing them for preservation. That work has continued over the years, with Tanslin releasing episodes and clips online that don’t require expensive licensing agreements and fans uploading episodes from their original VHS recordings to YouTube.

There’s been no further word on digitizing efforts for the complete series, though Tanslin has reported that a future home video release isn’t out of the question. If that materializes, it’s likely Gary Gnu will be first to deliver the news.