SAN FRANCISCO — Koala Springs International on Tuesday ordered a nationwide recall of its blended mineral water and fruit drink products after Florida health officials discovered traces of benzene in randomly tested bottles.
It is the sixth recall of a bottled water product in the United States this year, the most notable being the Perrier recall in February.
"We are taking this action willingly and voluntarily to protect our product and its good name," said John Chatham, president of the Australia-based firm. Koala's U.S. operations are based in Fremont, Calif., and its products are bottled in Stockton and Sacramento, Calif., and in Columbus, Ohio, using locally purchased mineral water and fruit concentrate from Australia.
The company said tests of bottles distributed to the East Coast revealed benzene levels of 11 to 18 parts per billion. That is more than two to three times the 5 parts per billion maximum level permitted for drinking water by the federal Safe Drinking Water Act of 1986. The chemical can cause cancer.
West Coast beverages were not tested but were withdrawn from the market as a precaution, Chatham said.
Richard Hunter, Florida's assistant health officer for environmental health, said the level of benzene found in the Koala products "does not pose any significant health risks for the general public."
Still, Florida alerted retailers about the problem last Thursday and asked retailers in the state to remove the product from their shelves.
Retailers around the country began withdrawing Koala from their shelves Tuesday morning after independent laboratories retained by the company confirmed Florida's findings over the weekend.
"We sent an E-mail (electronic mail) message to all our stores as soon as we got word from the company," Safeway Stores spokesman Brian Dowling said.
Koala, which sells about $60 million of its sweetened carbonated beverage annually in the United States and $150 million worldwide, occupies a market niche somewhere between plain sparkling water and soda pop.
Bottled-water industry observers said that, even though Koala is not technically considered a bottled water because of its fruit and fructose content, the Koala scare--coming on the heels of the worldwide Perrier recall--could damage an industry that is built on an image of purity.
"The bottom line is, it's going to hurt," said Jonathan Hall, publisher of Bottled Water News and Home Water Report, two trade publications. "Health conscious consumers are going to begin wondering whether they should purchase bottled water."
Hall said that in addition to the Perrier recall, San Pelligrino, Montclair, Wissahickon and Mt. Pocono brand waters have instituted small regional recalls.
But Geary Campbell, a spokeswoman for the International Bottled Water Assn. in Washington, D.C., said it is unfair to lump Koala in with those incidents. "Koala may tout itself on the coattails of this industry; it is not a bottled water," she said. "It is a soft drink."
Indeed, California considers Koala a soft drink because it contains sweeteners and preservatives, said Dr. Jack Sheneman, food and drug scientist at the Department of Health Services in Sacramento. Florida, on the other hand, classifies Koala as a bottled water because the words "mineral water" appear on its label.
"The confusion stems from the fact that the U.S. Food and Drug Administration has failed to establish standards to either define or regulate bottled water products," said Claudia Beville, a staffer for the U.S. House of Representatives Subcommittee on Oversight and Investigations.
The subcommittee has been looking into bottled water labeling and regulations since last March.
Koala's competitors in the blended mineral water and juice market include Sundance and Calistoga. Koala began bottling its product in the United States using Australian concentrate and local water about 18 months ago, after "the business grew to a size where we just couldn't export enough product," Chatham said.
Koala flavors include orange-and-mango, kiwi, lime-and-grapefruit and apple-and-blackcurrant.
Chatham said the recall is "a disastrous situation" for the 40-employee firm, which has climbed to No. 5 in the bottled water industry from No. 10 in the past year by expanding its East Coast distribution.
"We don't know where (the benzene) is coming from," Chatham said. "We had been monitoring the product ourselves and hadn't detected benzene at all . . . . All we know is that it shouldn't be in our products and we don't want it there."
He said the company is launching a complete investigation of all its plants and raw materials to determine the source of the contamination.
At Perrier, whose recall also followed the discovery of benzene in its product, the source of the contamination was finally traced to clogged filters, Hall said. The product has been reintroduced and has recaptured nearly all of its market, he said.
Chatham said that, once the state of Florida's findings were confirmed by the company, Koala had no choice but to recall the product "no matter what it costs, no matter how much it hurts."
"You can't compromise in situations like these," he said.