Book 17: Good and Evil

Part 11.  Poor Pepsi is trapped in the numbers game (2)

            PEPSI COLA’s Number Fever sales promo is one of the most successful in the history of Philippine marketing, offering prizes for numbered bottle caps or crowns ranging from P100 to P1 million, on which Pepsi will shoulder the 20 percent withholding tax.  One winning number representing a complete set of prizes, is released everyday in contrived hyped-up suspense, and announced daily on television and all major newspapers which all benefit from increased viewership and readership.  The promo period covering an original 12 weeks was extended to cover a period of 17 weeks from February 17 to June 12, 1992.

            It all started as a “mistake” of Pepsi-Cola in sending out last Monday May 25 the latest daily winning number in its Number Fever: 349.  It was duly broadcast by Channel Two and posted on a signboard at the Quezon City Pepsi plant, then hastily withdrawn as a mistake and the alternate number 134 listed in newspaper ads as the winning number of the day.  By Wednesday, literally thousands of people from all corners of the land as far away as Davao, made a bee-line for Pepsi plant in Quezon City, clutching their bottle crowns numbered 349 and demanding their prizes.  Then all hell broke loose, with a lynch mob at bay and Pepsi itself being investigated by the Department of Trade and Industry (DTI) and threatened with monstrous lawsuits.

            Sales promotion through games of chance have always been an attraction for the consuming public.  The most common is clipping coupons, filling the blanks like I love Ovaltine because…. and sending them in with your name and address.  All these coupons go into a rotating drum and the winning entries are drawn in public view.

            Another sales gimmick offer hidden marks under bottle caps or crown, each mark entitled to a prize.  Coca-Cola offers cash in amounts stated under the crown as much as P25,000 with multipliers that earn you even thrice the stated amounts.  Sarsi offers combinations of crowns; a mark of two bicycles plus another mark of one bicycle gives a prize of one mountain motor bike; only there seems to be an extreme shortage of one-bicycle crowns.

            Coca-Cola and Sarsi of course hold all the aces.  They can distribute those crown marks, for instance more in the sparsely populated provinces than in the crowded cities, or limiting the number of crucial crown marks, that statistically prejudices many of their customers in the cities.  Many of us realize this and lose enthusiasm for such games.

            It is different with the numbers game.  The almost infinite number of combinations and permutations of digits, and the impersonal science of mathematics, somehow assures us that each number has an equal chance of winning as another, that pure and random chance rules the numbers game.  The Number Fever was perceived as such a game, and it was a sensation.  It simply smothered the opposition from Coke and Sarsi… until the number 349 came up.

  • Pepsi announced that number 349 is not a winning number nor will it ever be because all winning numbers were already predetermined before the game even began, something the consuming public was never told. This numbers game did not involve pure random chance at all, only a modified form like Coke’s.  Some numbers were never meant to win.
  • The shock of finding out that the game did not really involve the element of chance, was coupled with the uncomfortable feeling that someone knows what the winning numbers are before the game began. Pepsi felt compelled in fairness to release all the rest of the winning numbers not yet announced, and found that the number 349 was after all included among the winning numbers.  This should have settled the controversy to everybody’s satisfaction.
  • But there is another complication. The number 349 was found to have, not just one security code as other winning numbers have, but three security codes, two of which (L-2560-FQ and L-3560-FQ), according to Pepsi, are not entitled to prizes!  What!  Are some numbers printed on more crowns than others?  promising more prizes when the chances of winning is zero?  One can only surmise that the winning 349 was an unexplainable mistake; that other non-winning numbers, as 349 is, are most probably multiple coded and printed on many more crowns than the winning numbers.

            Is Pepsi guilty of false advertising?  Not necessarily, for it specified in small print that every day during the extension period, will be announced “a pre-selected 3-digit Winning number.”  We are not sure however that such claim was made for the main promo period.

            Most people feel that Pepsi is guilty of misrepresentation because the word “pre-selected” can mean anything from years ago to the minute before the winning number is announced.  And the public bought those Pepsis with the expectation that every number they draw has a fair and equal chance to win.  Which is not true.

            In the case of the Coke and Sarsi promo games, one knows upon peeling off the crown if one won or lost; there is no “bitin,” no future expectation, no sense of having been fooled.

            As long as those two code numbers L-2560-FQ and L-3560-FQ do not represent fake Pepsi crowns, those holding the losing 349 number may have a legitimate claim to a prize.  That is why lawyers advise them to refuse the P500 goodwill bonus for every crown numbered 349, and sue the hell out of Pepsi.

            There are unbelievably at least six persons who claim to have won P1 million each for crowns numbered 349: Sgt. Socrates Jimenez from the Army Operation Center, Fort Bonifacio; Juliet Pineda of 297 DT Manang Street, Parada, Valenzuela; Jose R. de la Cruz, Jordan Park Homes, Fairview, QC; Lilia Ramos from Davao; Joseph Ilagan, 41 Sunrise Hills, New Manila, QC; Leonie Bosano, Quezon City.

            There are many more people claiming prizes of P100,000, P50,000, P10,000, P1,000, and P100.  And lawyers are busy getting down their names for a possible class suit against Pepsi Cola, promising a reasonable chance of winning the case, estimated to be worth P7 billion plus damages, in what might be the most expensive suit in the history of Philippine jurisprudence.

            If this happens, the local Pepsi franchise holders will probably go bankrupt, the Pepsi International will probably take over the local operations and start from square one.  Or Pepsi International may find itself knee-deep in lawsuits as well, and withdraw from the market, blaming their bad luck on aswangs and mangkukulams.

            And the Coca Cola and the Sarsi boys will pop open champagne bottles and celebrate, for they are the real winners in the Pepsi Number Fever game.  And also the lawyers.  (to be concluded)


Part 12.  Pepsi can’t pay P700 BILLION on 349 crowns (3)

            THE local franchise holder, Pepsi Cola Products Phil. Inc. (PCPPI), is owned by a group led by Luis “Moro” Lorenzo, Ateneo basketball hero and family friend whose father Pablo Lorenzo was with me in the Macapagal cabinet and in the National Economic Council.  Unimpeachable sources close to him and the management told me of Pepsi’s heartbreaking dilemma.  These are the REAL figures, nothing like what you read in the papers:

  • The goodwill P500 offered per crown numbered 349, was paid to 254,000 people for a total of P126 million as of June 3. Racketeers are producing false 349 crowns to complicate matters.
  • Not all winning numbers have P1 million prize, but when it does, it has only ONE. For 349 crowns, however, 100,000 persons claim to have won P1 million each, a total of P100 BILLION.
  • Usually prizes for each winning number total only P500,000 to P2 million. For 349 crowns, the prizes total (hold your breath!) P700 BILLION, more than twice our national budget.  That’s $27 BILLION, as large as our entire foreign debt!

            It is a disaster of monstrous proportions, the result of computer error and human greed.  Pepsi was selling impossible dreams promising 100,000 people a chance to win P1 million each on one crown numbered 349; on winning numbers it delivers only one!!  How many more non-winning numbers sell such multiple false fantasies?  Whose fault is it???

  • Blame Pedro Vergara, a Chilean who invented it, and a Mexican firm named DG Consultares which programmed it for the Pepsi Cola International (PCI) all over the world. This Number Fever, also called Numero Mania, was used successfully since 1984 in Argentina, Brazil, Mexico, Chile, Venezuela, Ecuador, Peru and Puerto Rico — generating as much as 40 percent sales growth.  This consists of 3-digit numbers fed into a Random Number Generator computer program which selects winning numbers at random before the game is played.  When the crowns are numbered, there are 100,000 times more prizes on each non-winning number than on winning numbers!  Blame the computer of the Mexican firm for the glitch that goofed, and gave the wrong number TWICE, a mistake that couldn’t happen again in a million years.
  • Blame the Department of Trade and Industry (DTI) for approving a game played with loaded dice, peddling impossible dreams.
  • Blame the foreign PCI which is responsible for the promotion, advertising and marketing of Pepsi Cola products. PCI chose the Number Fever promo, gave the list of predetermined winning numbers to the DTI and kept a copy for itself; it gave the printing plates to the crown manufacturers for use in printing the crown; it released the winning number for each day of the promo.
  • But do NOT blame the Pepsi Cola Products Philippines Inc. (PCPPI) the local franchise holder, which by the terms of the franchise agreement, receives delivery of the crowns, bottles the drinks and delivers them, that is all. It has nothing to do with Number Fever, but it already paid P126 million to redeem the 349 crowns.

            At the start of the year, the local PCPPI under its president Rod Salazar undertook to provide the bottles, coolers, plastic shells for the campaign.  The foreign PCI provides the funds for the Number Fever promo, as part of its marketing and advertising program.

            The foreign PCI informs the media of the daily winning number a day before: Channel 2, Daily Inquirer and the Radio Mindanao Network.  The foreign PCI also tells the local PCPPI which passes on the winning number by fax and telegram to its 12 bottling plants, which in turn informs the local radio stations.

            On May 25, the foreign PCI informed the Inquirer, Channel 2 and the local PCPPI of the winning number 349.  One PCPPI secretary named Terry called up her boss Ms. Rose Vera, saying “Hindi dapat ito manalo, there seems to be many 349 crowns in circulation among people I know.”

            Rose Vera called up the foreign PCI which discovered its mistake, withdrew the 349 number and substituted number 134.  Too late, it was posted on the Pepsi signboard in QC for two hours, and was broadcast on Channel Two at 6 PM when the station had a viewership of 70 percent of the TV audience nationwide by satellite.

            Pedro Vergara’s program goofed.  The Mexican DG Consultares’ computer goofed.  The foreign PCI goofed.  And the local PCPPI is left holding the bag.

            There seems to be only one reasonable solution.  Holders of 349 should accept the P500 per crown offered by PCPPI.  And PCPPI should get the foreign PCI to pay for its losses.

            Suing PCPPI and PCI seems self-defeating, since this is of debatable legality and takes years to adjudicate; and ultimately PCPPI has no funds, no P700 BILLION; and there is no way to get hold of PCI’s assets abroad.

            If PCI withdraws from the Philippine market, PCPPI will go out of business, its 8,000 employees thrown out of work; its assets and investment gone to pot; its 200,000 outlets deprived of products to sell.  And if there is no more Pepsi competition in the Cola market, the consumers will ultimately suffer.

            Think about it.

June 15 to 19, 1992, Philippines Daily Inquirer