It is often said that transparency is the most important value that a company can have. It might sound like a cliché, but this is a literal truth. Case in point: SIGG Switzerland (USA), Inc.  

A few months ago, SIGG was caught in a lie. Whereas the company built a profitable business in the US marketing metal, reusable bottles as a hip and environmentally sound alternative to plastic water bottles, it failed to inform its health conscious target audience that a large portion of its production line contained bisphenol A, a compound suspected to be hazardous to humans since the 1930s. 

When initially asked by consumer-watch groups whether SIGG products contained any toxic ingredients, company CEO Steve Wasik assured people: “Very thorough migration testing in laboratories around the world is conducted regularly and has consistently shown SIGG aluminum bottles to have no presence of lead, phthalates, Bysphenol A (BPA), Bysphenol B (BPB) or any other chemicals which scientists have deemed as potentially harmful.”

It turned out this wasn’t the case. SIGG bottles did in fact contain BPA. After the truth leaked out, it became clear that a public statement from management was necessary, and Wasik issued a written apology:

“I am writing to apologize.

As Chief Executive Officer of SIGG, a leading maker of reusable water bottles, I made a mistake when I decided not to announce that our old bottle liner contained trace amounts of bisphenol A. I learned about the liner's content in 2006, when there was debate in the scientific community about the effects of BPA. Scientists lined up on both sides of the issue: Some said BPA posed potential health risks, others said BPA was perfectly safe...Today, the debate continues. Scientists are still split on the issue. But the consumer environment has changed. Because of the all the conflicting data, a growing number of people have decided to eliminate the concern from their lives by avoiding BPA. Given the situation, I recently decided that we had to tell everyone that bottles manufactured with our former liner (prior to August 2008) contained trace amounts of BPA.

We were right to make the announcement. But I was wrong to have waited this long. One of our primary goals at SIGG has been to help reduce unnecessary waste and to educate people on the environmental benefits of using a reusable bottle. With that objective in mind, SIGG has been labeled a “green” company.”

Wasik’s apology was too little, too late. Some even found it offensive. Elaine Shannon, editor in chief at the Environmental Working Group, told Advertising Age: “Americans want transparency, and this company doesn’t seem to understand that. It’s mystifying. [Wasik’s letter] seems to be talking down to people, and a lot of people won’t tolerate that tone.”

Judging from complaint associated with the lawsuit, which was filed on behalf of a nationwide class of consumers who purchased SIGG reusable aluminum bottles that unbeknownst to them contain BPA, the company’s lack of transparency amounts to serious business. The named plaintiffs allege breach of contract, breach of express and implied warranties, and violation of the Kentucky Consumer Protection Act. They seek a class certification order; compensatory, punitive and statutory damages; restitution and disgorgement of profits; attorney’s fees and costs; prejudgment interest; and the costs of suit. 

The potential liability exposure for SIGG is significant, to say nothing of the added adverse publicity and wrecked credibility amongst the company’s own target market. Although it is possible that, as with many cases, this class action suit will settle before trial, even if it does the damage will have been done. Unfortunately, when something like this comes along, the negative impact on a company’s sales can be as profound as any adverse legal judgment.  

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