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

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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.

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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.”

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.

Amazon's Under-the-Radar Coupon Page Features Deals on Home Goods, Electronics, and Groceries

Stock Catalog, Flickr // CC BY 2.0
Stock Catalog, Flickr // CC BY 2.0

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

Now that Prime Day is over, and with Black Friday and Cyber Monday still a few weeks away, online deals may seem harder to come by. And while it can be a hassle to scour the internet for promo codes, buy-one-get-one deals, and flash sales, Amazon actually has an extensive coupon page you might not know about that features deals to look through every day.

As pointed out by People, the coupon page breaks deals down by categories, like electronics, home & kitchen, and groceries (the coupons even work with SNAP benefits). Since most of the deals revolve around the essentials, it's easy to stock up on items like Cottonelle toilet paper, Tide Pods, Cascade dishwasher detergent, and a 50 pack of surgical masks whenever you're running low.

But the low prices don't just stop at necessities. If you’re looking for the best deal on headphones, all you have to do is go to the electronics coupon page and it will bring up a deal on these COWIN E7 PRO noise-canceling headphones, which are now $80, thanks to a $10 coupon you could have missed.

Alternatively, if you are looking for deals on specific brands, you can search for their coupons from the page. So if you've had your eye on the Homall S-Racer gaming chair, you’ll find there's currently a coupon that saves you 5 percent, thanks to a simple search.

To discover all the deals you have been missing out on, head over to the Amazon Coupons page.

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Dollymania: When Dolly the Sheep Created a '90s Media Sensation

Dolly the sheep at the National Museum of Scotland
Dolly the sheep at the National Museum of Scotland
Paul Hudson, Flickr // CC BY 2.0

It was Saturday, February 22, 1997, and British researchers Ian Wilmut and Keith Campbell were expecting a final moment of calm before the results of their unprecedented scientific experiment were announced to the world.

The team had kept the breakthrough under wraps for seven months while they waited for their paper to be published in the prestigious journal Nature. Confidential press releases had gone out to journalists with the strict instruction not to leak the news before February 27.

But that night, the team was tipped off that journalist Robin McKie was going to break the story the very next day in the British newspaper The Observer.

Wilmut and Campbell raced to the lab at the Roslin Institute on Sunday morning as McKie's story hit the media like a thunderbolt. International news outlets had already started swarming at the institute for access to Wilmut and Campbell's creation: Dolly the sheep, the world's first mammal successfully cloned from a single adult cell. Shielded from the general public, she stuck her nose through the fence and munched calmly on the hay in her pen, unperturbed by the horde of news photographers. Dolly, a woolly, bleating scientific miracle, looked much like other sheep, but with a remarkable genetic difference.

By the end of that Sunday, February 23, nearly every major newspaper in the world carried headlines about Dolly the sheep.

A Long-Awaited Breakthrough

Born on July 5, 1996, Dolly was cloned by Wilmut and Campbell's team at the Roslin Institute, a part of the University of Edinburgh, and Scottish biotechnology company PPL Therapeutics. The scientists cloned Dolly by inserting DNA from a single sheep mammary gland cell into an egg of another sheep, and then implanting it into a surrogate mother sheep. Dolly thus had three mothers—one that provided the DNA from the cell, the second that provided the egg, and the third that carried the cloned embryo to term. Technically, though, Dolly was an exact genetic replica of only the sheep from which the cell was taken.

Following the announcement, the Roslin Institute received 3000 phone calls from around the world. Dolly's birth was heralded as one of the most important scientific advances of the decade.

But Dolly wasn't science's first attempt at cloning. Researchers had been exploring the intricacies of cloning for almost a century. In 1902, German embryologists Hans Spemann and Hilda Mangold, his student, successfully grew two salamanders from a single embryo split with a noose made up of a strand of hair. Since then, cloning experiments continued to become more sophisticated and nuanced. Several laboratory animal clones, including frogs and cows, were created before Dolly. But all of them had been cloned from embryos. Dolly was the first mammal to be cloned from a specialized adult cell.

Embryonic stem cells, which form right after fertilization, can turn into any kind of cell in the body. After they modify into specific types of cells, like neurons or blood cells, they're call specialized cells. Since the cell that gave rise to Dolly was already specialized for its role as a mammary gland cell, most scientists thought it would be impossible to clone anything from it but other mammary gland cells. Dolly proved them wrong. 

A Worldwide Reaction—And Controversy

Many scientists in the '90s were flabbergasted. Dolly’s advent showed that specialized cells could be used to create an exact replica of the animal they came from. “It means all science fiction is true,” biology professor Lee Silver of Princeton University told The New York Times in 1997.

The Washington Post reported that "Dolly, depending on which commentator you read, is the biggest story of the year, the decade, even the century. Wilmut has seen himself compared with Galileo, with Copernicus, with Einstein, and at least once with Dr. Frankenstein."

Scientists, lawmakers, and the public quickly imagined a future shaped by unethical human cloning. President Bill Clinton called for review of the bioethics of cloning and proposed legislation that would ban cloning meant ''for the purposes of creating a child” (it didn't pass). The World Health Organization concluded that human cloning was "ethically unacceptable and contrary to human integrity and morality" [PDF]. A Vatican newspaper editorial urged governments to bar human cloning, saying every human has "the right to be born in a human way and not in a laboratory."

Meanwhile, some scientists remained unconvinced about the authenticity of Wilmut and Campbell’s experiment. Norton Zinder, a molecular genetics professor at Rockefeller University, called the study published in Nature "a bad paper" because Dolly's genetic ancestry was not conclusive without testing her mitochondria—DNA that is passed down through mothers. That would have confirmed whether Dolly was the daughter of the sheep that gave birth to her. In The New York Times, Zinder called the Scottish pair's work ''just lousy science, incomplete science." But NIH director Harold Varmus told the Times that he had no doubt that Dolly was a clone of an adult sheep.

Dollymania!

Because she was cloned from a mammary gland cell, Dolly was named—dad joke alert—after buxom country music superstar Dolly Parton. (Parton didn’t mind the attribution.) Like her namesake, Dolly the sheep was a bona fide celebrity: She posed for magazines, including People; became the subject of books, journal articles, and editorials; had an opera written about her; starred in commercials; and served as a metaphor in an electoral campaign.

And that wasn't all: New York Times reporter Gina Kolata, one of the first journalists to give readers an in-depth look at Dolly, wrote Clone: The Road to Dolly, and the Path Ahead and contrasted the animal's creation with the archetypes in Frankenstein and The Island of Dr. Moreau. American composer Steve Reich was so affected by Dolly's story that he featured it in Three Tales, a video-opera exploring the dangers of technology.

The sheep also became an inadvertent political player when the Scottish National Party used her image on posters to suggest that candidates of other parties were all clones of one another. Appliance manufacturer Zanussi used her likeness for a poster with her name and the provocative caption "The Misappliance of Science" (the poster was later withdrawn after scientists complained). In fact, so widespread was the (mis)use of her name that her makers eventually trademarked it to stop the practice.

Dolly's Legacy

Following Dolly, many larger mammals were cloned, including horses and bulls. Roslin Biomed, set up by the Roslin Institute to focus on cloning technology, was later sold to the U.S.-based Geron Corporation, which combined cloning technology with stem cell research. But despite her popularity—and widespread fear— Dolly's birth didn't lead to an explosion in cloning: Human cloning was deemed too dangerous and unethical, while animal cloning was only minimally useful for agricultural purposes. The sheep's real legacy is considered to be the advancement in stem cell research.

Dolly’s existence showed it was possible to change one cell’s gene expression by swapping its nucleus for another. Stem cell biologist Shinya Yamanaka told Scientific American that Dolly’s cloning motivated him to successfully develop stem cells from adult cells. He later won a Nobel Prize for his results, called induced pluripotent stem cells (iPS) because they're artificially created and can have a variety of uses. They reduced the need for embryonic stem cells in research, and today, iPS cells form the basis for most stem cell research and therapies, including regenerative medicine.

Dolly had six offspring, and led a productive, sociable life with many human fans coming to visit her. In 2003, a veterinary examination showed that Dolly had a progressive lung disease, and she was put down. But four clones created from the same cell line in 2007 faced no such health issues and aged normally.

Dolly is still a spectacle, though, nearly 25 years after her creation: Her body was taxidermied and put on display at the National Museum of Scotland in Edinburgh.