1. Archive

Perrier recalls bottles worldwide

PARIS - Perrier announced Wednesday that it was withdrawing every bottle of its sparkling mineral water throughout the world after traces of benzene, a toxic chemical, were reported in bottles tested in Denmark and the Netherlands. The new recall comes after Perrier was removed from stores and restaurants in the United States last weekend, also because traces of benzene were found in a few bottles.

The company said that 160-million bottles, worth around $70-million before taxes, would be taken off the market and destroyed.

Distributors in Japan and West Germany have also ordered the withdrawal of millions of the familiar green bottles, in some cases as a precautionary measure, while local health authorities test the carbonated water.

The French company exports 60 percent of its production.

The company announced the worldwide recall as a step to regain consumer confidence.

"I have built up this company over the past 40 years around an image of perfection," Perrier's chairman, Gustave Leven, said at a news conference. "I don't want the least doubt, however small, to tarnish our product's image of quality and purity."

"Our image and the respect and confidence of consumers have no price for me," the 75-year-old businessman said in his first public appearance since the company crisis erupted last weekend.

The statements made Wednesday changed the company's account of how the benzene got into the bottles.

Stressing that the source of the mineral water, a spring at Vergeze in southern France, remained pure, Leven said the contamination problem was the result of "a human error" when filters in its bottling plant at Vergeze were not replaced on schedule.

He said that benzene, which has caused cancer in laboratory animals, and other chemicals were naturally present in minute amounts in the spring.

The company uses filters to remove such impurities, but for some reason they were not changed when they should have been.

"There was therefore an accumulation of benzene in the product," Leven said.

When benzene was found in the Perrier in the United States, company officials said it got into the bottles of water because a worker had mistakenly used a cleaning solvent containing the chemical to remove grease and grime from some production equipment.

Leven said that all the filters had been changed and that, since last weekend, normal production of around 6-million bottles a day had resumed.

"The machines will work at full blast, six days a week, 24 hours a day, until we have rebuilt our stocks," he said.

The company's vice chairman, Jacques Vincent, said Perrier would again be available within days in some countries and within three weeks in others.

The health scare and the accompanying financial loss for the company pushed down the value of Perrier's shares on the Paris Bourse, or stock market, by 4.1 percent Wednesday.

The price per share has fallen by 16.5 percent - from 1,692 francs, or $297, to 1,413 francs - since Friday's closing, one day before 72-million Perrier bottles were withdrawn in the United States.

Wednesday, the Bourse's Commission of Operations, equivalent to the Securities and Exchange Commission in the United States, said it would investigate possible insider trading in Perrier shares amid reports there was heavy buying of options to sell the stock on Friday before the company's announcement.

The options, called puts in U.S. markets, give holders the right to sell shares of the stock at the Friday price, and those who acquired them could have made a large profit when Perrier's shares slumped Monday.

When the withdrawal of bottles was announced in the United States last weekend, the company's American distributor estimated that it might be three months before stocks were replenished.

Trying to strike an optimistic note, Leven said that Perrier was already back in business.

"We will be even stronger because our image is intact," he said of a brand that has 5.7 percent of the U.S. bottled water market. "Our consumers will know just how far we're willing to go in our battle for the truth and perfection."

Also at the news conference was a platoon of scientists who vouched for the purity of Perrier's water at its source and reiterated statements made by the Food and Drug Administration in the United States last week that the amounts of benzene found in 13 test samples were not enough to be harmful.