Coca-Cola began to recall 500,000 bottles of Dasani in the UK after discovering it contained higher than expected levels of the chemical bromate, which could cause an increased cancer risk.
The health scare came just two weeks after Dasani was exposed as being purified tap water, made from Thames water taken from Sidcup and enhanced by purification and added minerals.
Coca-Cola has already spent 拢7m advertising the brand in a campaign created by Lowe and the task of relaunching it to reassure consumers could be an expensive one.
Marketing consultant Allyson Stewart-Allen believes it is now going to be extremely difficult for Coke to relaunch Dasani in the UK.
"It's now going to be next to impossible for Coke to relaunch Dasani in the UK. Only two weeks ago consumers learned that the product comprised filtered tap water. Now today we learn the product contains a carcinogenic, which exceeds UK legal limits," she said.
The scare in the UK comes five years after another health scare in Europe, when more than 200 people became ill after drinking Coca-Cola drinks. That problem was traced back to a carbon dioxide problem in Belgium.
Coca-Cola has rejected comparisons with the incident in Belgium, which saw as many as 5m cans recalled. Coke's handling of that PR crisis was seen as slow. Its former chief executive Doug Ivester waited almost a week before making a public response.
Stewart-Allen argues that Coke needs to rebuild trust but, as Belgium has previously shown, its track record is poor.
"This is very surprising for a company as careful and deliberate as Coca-Cola, and a blow to the trust it is aiming to build with consumers. Following the debacle in Belgium with rat poison contamination on the outside of the cans, trust is what it is needing to build and so far its track record isn't too good," Stewart-Allen said.
Even though the withdrawal in the UK is voluntary, Bill Pecoriello, an analyst at Morgan Stanley, believes that not only has Coke been damaged but its competitors will be quick to take advantage of the situation.
"This could damage Coke's ability to relaunch Dasani in the UK as Nestle and other players will likely take the opportunity to remind consumers that they are selling spring water versus the purified 'tap' water Coke is selling," he said in a research note on Friday.
The Dasani debacle could have fatally wounded Coke's efforts to diversify away from fizzy drinks that are linked to obesity, of which Dasani was an important plank.
It is unlikely that reassurances from the Food Standards Agency, which has said that there is no immediate risk to the public's health, will help Coke's case.
"This is a sensible measure by the company as bromate is a chemical that could cause an increased cancer risk as a result of long-term exposure, although there is no immediate risk to public health," an FSA spokesman said.
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