Corona Extra, the Mexican beer whose astonishing success has been both a mystery and source of jealousy within the brewing industry, is suddenly battling a mysterious problem of its own: persistent false rumors that it is contaminated. To be specific, with urine.
As a result, its major U.S. importer is about to undertake an extraordinary and high-risk strategy of answering the rumor in the news media.
"There's a risk involved and we know that," said Michael J. Mazzoni, executive vice president and general manager of Barton Beers in Chicago. "But we've reached the point where everybody's going to know about it anyway, so why not tell the true story?"
Barton, which imports Corona into 25 Western states from Mexico City, traced the tale to a competing wholesaler in the Reno, Nev., area in May. In an out-of-court settlement earlier this month, Luce & Son Inc., which carries Heineken and other beers -- but not Corona -- was obliged to declare publicly that Corona was "free of any contamination."
But that wasn't the end of it. Just as Procter & Gamble once faced rumors that its corporate symbol was linked to devil worship, the false story about Corona has taken on a life of its own. It has spread into Southern California, parts of Northern California and such cities as Phoenix, Seattle, Boise, Aspen, Minneapolis and Milwaukee. It apparently has hurt sales in some places and has threatened to undermine one of the most spectacular success stories in the history of the beverage industry.
As a result, Corona has decided to go public with its dilemma, hoping to squelch the rumor by facing it head-on in the media.
Corona's problem has nothing to do with contamination -- but seemingly a great deal to do with competition in a tough industry faced with lackluster growth for much of the past several years. "I've never heard of a beer sample with urine in it," said William Siebel, executive vice president of J.E. Siebel Sons' Co. in Chicago, which tests the ingredients of Corona and other beers. "It (Corona) is a pure product with no contamination."
It also is a product that caught the entire industry off-guard after making a little-noticed entry into the United States in 1981. Packaged in a long-necked clear bottle, with a spray-painted blue-and-white label, Corona had cachet: It was favored by Southern California's surfing crowd. Style-conscious beer drinkers caught on quickly, despite virtually no advertising. By 1986, Corona had moved up to second place in beer imports, behind Heineken, selling 13.5 million cases in the United States.
"Corona is one of the most extraordinary success stories in the history of beverage marketing," Paul Gillette, publisher of Beverage Hotline, a Los Angeles-based industry newsletter said.
Overall demand for Corona is so intense that distributors have been getting limited allocations this year. Nonetheless, said Mazzoni, areas in which the rumor has circulated for longer than five weeks have reported falling sales, and some stores have experienced sharp drops of 80 percent.
The U.S importer now is gathering information for possible legal action against several other distributors besides Luce who may have played a role in circulating the story. Luce executives would not return telephone calls earlier this week.
Some of the rumors say the story started with a report on the CBS television show "60 Minutes," but a CBS spokeswoman said the show has done no reports on the subject of beer for the last four years.
Such a situation provides companies with the grim options of rumor control: They can refuse to dignify the tale with a response and take the chance that it will go away, or they can try to meet it head-on and hope the truth wins out.
The problem has been faced by fast-food companies, department stores and others in recent years, and dealt with differently.
In the case of Procter & Gamble, the giant consumer-products company tried to fight off the Satanism rumors -- which were based on its moon-and-stars corporate symbol -- with publicity and lawsuits. Ultimately, however, it decided to phase out the logo rather than endure the headache. Faced with a genuine case of sabotage to its Tylenol product, Johnson & Johnson preserved public credibility by conducting massive recalls and a candid advertising campaign.
According to some observers, conditions in beer distributing have become more conducive to dishonest whispering campaigns in light of growing competition and flat sales. "At the distributor level it's a common tactic. Things are so competitive in terms of distribution," said Tom Pirko, president of Bevmark Inc., which consults in the beverage industry. "People try to find whatever advantage they can."