Coca-Cola: Latin America's Second Religion

By Kari Lydersen
May 28, 2002

If you were to choose a poster boy for neoliberalism and unfettered free trade in Latin America, a good choice would be cowboy capitalist Vicente Fox, the president of Mexico. When Fox, of the pro-business PAN party, won the election in 1999, he ended the 71-year stranglehold of the institutional PRI party. Fox's election was heralded by both U.S. businessmen and government officials and Mexican citizens across the economic spectrum as the dawning of a new era for Mexico. Mexicans were hopeful that the charming businessman in boots would usher in a new era of democracy and stability in the country and bring Mexico into the economic First World.

U.S. interests were also glowing at the prospect of having free trade and U.S-friendly Fox in office. From the start, Fox showed himself to be a proponent of free trade pushing for the proposed Free Trade Area of the Americas (FTAA) agreement and the Plan Puebla Panama (PPP) trade corridor.

Fox played up his macho Mexican image during the election, but his training for the presidency didn't come on a ranch; it came plotting the success of a sugary brown soft drink, earning him the nickname, "Coca-Cola Kid."

Fox became an executive at Coca-Cola de Mexico after graduating with a business degree from Mexico's Universidad Iberamericana in 1964. He stayed with the company for 15 years.

In a 1999 New York Times interview, Fox said, "Working at Coca-Cola was my second university education. I learned that the heart of a business is out in the field, not in the office. I learned strategy, marketing, financial management, optimization of resources. I learned not to accept anything but winning."

Refreshment or Religion?

And Coke certainly has been winning its battle for the mouths and hearts of Latin America, as well as North America, Asia and basically the entire world.

Christmas time in Ecuador, a heavily Catholic nation, finds the cities and campos of the country awash in nativity scenes and sparkling lights. But even more than traditional Christmas decorations, Christmas in Ecuador means Coca-Cola.

El Malecon 2000, the beautiful new "millennium park" in the city of Guayaquil, sports a huge Christmas tree covered in oversize Coke bottle caps, next to a larger than life diorama of the famous Coca-Cola polar bear. Nearby a full size model cabin shows a homey scene complete with Coca-Cola curtains in the windows, posters of Coca-Cola on the walls and of course bottles of Coke on the table and in the refrigerator. In upscale malls in the city, the department store Santas are decked out in Coca-Cola regalia.

All the Coca-Cola/Christmas synergy is appropriate, because Coca-Cola could truly be called the second religion of much of Latin America.

Sentimental Coke T.V. ads showing people in remote areas all over the world happily guzzling the sweet brown beverage are not far from the truth from the remote jungle areas of Chiapas, Mexico to the Andean slopes of Ecuador; from the tiny thatch-roofed roadside towns of Bolivia and Peru to the sparkling major metropolises of Chile and Argentina, Coke is all over Latin America. Not only the beverage itself, but an infinite number of ads that blanket everything from billboards to shacks to government buildings to the concrete walls along mountain roadways.

While the ads essentially claim that opening a bottle of Coke is like an instant recipe for joy and community, Coke has had a far from beneficial effect on Latin America. For starters, Coke is very expensive for the average wage earner in most Latin American countries. Whether in Mexico, Ecuador or Honduras, a one-serving bottle will often cost between 40 and 70 cents, while the average worker only makes $5 a day or less.

Nonetheless, average daily consumption in most of Latin America is close to one serving a day.

Some may remember the grade school science project where you leave a tooth in a cup of Coca-Cola and watch it disintegrate in front of your eyes. In a region where only a tiny percent of people have access to dental care, this is no small problem.

If the cultural, health and economic problems with Coke's colonization of Latin America weren't bad enough, it also has a labor record that puts even most other multinational companies to shame. In Guatemala and Colombia, there is strong evidence that the Coca-Cola company actively supported the murders of union activists by paramilitary members at bottling plants run by its subsidiaries and contractors over the years. In Mexico, El Salvador and other countries there have also been ample allegations of the company using paramilitary strength to prevent unionizing and keep employees in line.

In 2001, Human Rights Watch (HRW) and the United Auto Workers (UAW) filed a lawsuit against Coke for the murder of union activist Isidro Gil Segundo and an ongoing campaign of intimidation, terror, murder and paramilitary activity against union members and leaders. Across the board, Coke and its Latin American bottling partners, including Panamco and Bebidas y Alimentos, have waged vicious anti-union campaigns and been accused of rampant illegal labor practices, intimidation techniques, unfair firings and physical attacks.

Coke Around the World

It was introduced to Latin America early, only four decades after it was first invented by pharmacist John Pemberton in Atlanta in 1886 and marketed as a patent medicine containing traces of cocaine.

By 1927 it was being sold in Honduras, Colombia and Mexico, along with Haiti and Burma. The next year it debuted in Venezuela, and by 1942 it had reached Nicaragua, Argentina, Brazil, Costa Rica and Uruguay. Today, Mexico has the highest per capita consumption of Coke in the world, along with Iceland.

A 1998 Panamco report notes that Guatemala had one of the lowest per capita soft drink consumptions in Latin America with only 167 eight-ounce servings per year, per person still an average of one drink almost every two days. The average for Latin America is 312 a year, compared to 852 in the U.S.

Sales and Marketing: The Red Blast

A report by Panamco, one of Coke's biggest Latin bottlers, notes that 1998 sales for Central America grew 78.2 percent to $190.4 million and 65.5 million unit cases. In Costa Rica, the report notes, Panamco Tica "rolled out the 100 Meters Program and Red Blast project in several regions, developing new nontraditional channels in areas of high pedestrian traffic to stimulate impulse consumption."

It notes that the campaign included the widespread distribution of the "metallic posters, flags and neon signs" that pepper Latin America like a rash "to call attention to our products, [and] instill a perception of value in the consumer."

Costa Rica also benefited from a "School" plan aimed at increasing the presence of Coke in schools.

In Nicaragua in 1998 Panamco launched a "Roots" plan that "aimed to transform small, traditional outlets into 'red' outlets by equipping clients with tailored merchandising materials, installing coolers and painting establishments in Coca-Cola colors." This program resulted in a 40 percent boost in client sales, according to the Panamco report. The report also boasts about turning Nicaragua's Duty Free zone into a "Coca-Cola territory." This label is ironically appropriate, considering that the Duty Free zone is an area where 12,000 workers assemble goods in a sort of free trade zone unrestrained by local labor law or worker protections.

Soccer is a passion in Latin America, and through massive sponsorship deals, Coke has declared itself the official drink of the sport. In fact, Coke has more or less declared itself the official drink of sports in general in Latin America, despite the fact that it's unhealthy and not conducive to top physical performance.

Bloody Union Battles

The majority of Coke bottling workers in Latin America are unionized, having fought hard battles to get and keep unions in their plants. In South and Central America, there are literally hundreds of thousands of people working in Coke bottling plants.

In Mexico in 1998, for example, there were 95 Coke bottling plants employing at least 50,000 workers, according to the International Unions of Food and Allied Workers (IUF) labor federation.

The federal lawsuit filed by the UAW and HRW against Coca-Cola on July 20, 2001 alleges "multiple acts and threats of murder, kidnapping and extortion" to thwart union activity at two Coke bottling plants in Colombia. The lawsuit alleges that Coke officials allowed and even encouraged paramilitary members to enter plants and threaten employees with death if they didn't quit the union. At least seven leaders of the trade union that represents workers at Coke facilities in Colombia have been murdered in the last decade.

Union activist Segundo, whose estate is a co-plaintiff in the suit, was killed with 10 gunshots in November 1996 at the Coke plant in Carepa, two weeks after the union had presented demands for $400 in pay a month, benefits and protection from paramilitaries.

The paramilitaries who shot Segundo then burned the union hall down during the night and called a meeting at which they told workers to quit the union or be killed. Unsurprisingly, all 43 workers at the plant signed letters renouncing the union. That same year Segundo's wife was murdered.

The suit, which was filed in U.S. district court in Miami, is being brought under the Alien Tort Claims Act (ATCA), a 1789 law which allows non-citizens to use the U.S. courts to hold Americans accountable for actions abroad. The International Labor Rights Fund, which is co-counsel for the plaintiffs, has also used the act to bring suits against Exxon Mobil and Unocal Corporation for human rights violations in Indonesia and Burma.

While most bottling plants are owned by Panamco or other companies, the Carepa plant is owned by an American citizen and Florida resident named Richard Kirby, who told media he had "no interest in politics" when asked about the murders and that he had only visited the plant once, years earlier. Kirby did not return a call for this story.

Coke has argued that the bottlers are independent companies, but the lawsuit notes that when Coke officials in Atlanta were notified, on numerous occasions, of the problem of paramilitary threats and violence, they did nothing.

Steve Coates, executive director of the U.S. Labor Education of the Americas Project (USLEAP), noted that most multinational corporations doing business in Latin America have codes of conduct for their suppliers and outlets.

"All the textile manufacturers we work with have codes of conduct, [as does] the banana industry Chiquita has a very specific code of conduct," said Coates. "But Coca-Cola has nothing. And they actually have more of a financial stake in the bottling companies than the textile companies, like Gap or Liz Claiborne, do with their suppliers. In those cases they are literally just the supplier, but Coke has financial investment in the bottlers and has a working relationship with them."

Luis Adolfo Cardona, the union general secretary at the Carepa plant, said management refused to negotiate with the union and constantly threatened to bring in "Cepillo," or "the brush," the nickname for the head of the local paramilitaries. Adolfo narrowly escaped being killed by paramilitaries but a friend of his, also involved with the union, was killed on plant premises. Union organizers in Guatemala had a similar experience to those in Colombia.

Eight union members were killed between 1975 and 1980 in Guatemala City after workers formed union at the Coca-Cola plant in the 1970s. It took an international solidarity campaign, a yearlong factory occupation, and a boycott to finally get a collective bargaining agreement in 1985.

Resistance is Futile

With the recent UAW/HRW lawsuit against Coca-Cola alleging the company has returned to its well-documented violent, illegal and murderous tactics most notably in Colombia, where the U.S. has an increasingly significant military and economic investment-the company is primed to aggressively exploit coercive First-to-Third World "free trade" agreements like NAFTA and the FTAA.

Today, Coca-Cola plainly stands as an unvarnished symbol of neoliberalism and modern corporate mercantilism. It is, plainly said, a multinational corporation exploiting cheap labor and "emerging markets," that employs an array of illegal and criminal business "strategies," and utilizes powerful public relations, marketing and lobbying powers to avoid accountability and fatten the company's profits just as its product fattens its consumers.

With its already considerable clout aided and abetted by increasingly institutionalized power, Coke stands poised to achieve a new level of political domination. And with one of its own products now employed as the President of Mexico, Coke can credibly crow about its truly global reach, and make good, in a perverse kind of way, on its threat to "benefit and refresh everyone it touches."

Kari Lydersen has written for many publications, including Chicago Ink, the Chicago Reader, the Washington Post, Punk Planet and In These Times.

FAIR USE NOTICE. This document contains copyrighted material whose use has not been specifically authorized by the copyright owner. India Resource Center is making this article available in our efforts to advance the understanding of corporate accountability, human rights, labor rights, social and environmental justice issues. We believe that this constitutes a 'fair use' of the copyrighted material as provided for in section 107 of the U.S. Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond 'fair use,' you must obtain permission from the copyright owner.

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