Coke: Campaigners Demand Action Against Feelgood Drinks Firm
Megabrand faces claims from India
to Latin America that it bullies small retailers, exhausts local water
supplies, and uses 'unsafe' additive.
Coca-Cola is the world's most famous and powerful brand, selling more
than one billion drinks every day. Its red and white logo can be seen
everywhere from remote hillside shacks in Afghanistan to vast neon
hoardings in central Tokyo.
With a marketing budget four times greater than the UN's annual spending
on combating child poverty, it has spent millions on buying up the
world's biggest sporting events - the World Cup and the Olympics -
and global celebrities such as Muhammad Ali, David Beckham and Aretha
But the drink which prides itself as the "real thing" is in trouble:
its global dominance is under serious threat from its rival Pepsi,
and its sales hit by a health-conscious backlash against the sugary
drinks widely blamed for the West's obesity epidemic.
And now human rights groups and anti-poverty campaigners are calling
for a global boycott of the world's most powerful drink - the latest
in a string of multinational brands that have been pilloried for allegedly
unethical and inhumane behaviour, such as Gap, Nike and Nestlé.
This week, as a Coca-Cola-sponsored replica of the World Cup is paraded
through London by Wayne Rooney, the National Union of Students will
hear demands for Coke to be stripped of its exclusive £15m deal to
sell its drinks at more than 700 campuses across the country.
Campaigners accuse Coke of using ruthless tactics to ensure that it
remains the world's number one brand. Coca-Cola, they allege, has
caused droughts and poisoned water supplies in rural India, been linked
to paramilitary gangs in Colombia and turned a blind eye to violent
attacks on trade unionists in Latin America, Asia and Russia.
In a report being published tomorrow, the Third World development
charity War on Want claims that Coca-Cola's wholesome, "feelgood"
image is beginning to crumble.
Louise Richards, the charity's chief executive, said: "Coca-Cola promotes
a sporty image of itself through tie-ins with sporting events, but
across the world their foul play is clear. Cases of environmental
damage, exploitation of water resources and abuses of workers' rights
are shockingly common. It's time that directors of multinational companies
were held to account."
The accusations are rejected by Coca-Cola, which insists it follows
the highest ethical standards, working closely with the UN, trades
unions and environment groups to improve its practices and promote
the latest technical innovations. "The Coca-Cola Company exists to
benefit and refresh everyone it touches," the corporation states in
its latest code of conduct.
Meanwhile, Coke's reliance on one of the world's most popular artificial
sweeteners, a compound called Aspartame, is also under examination.
British and European food safety experts are studying allegations
that Aspartame - the main sweetener in Diet Coke - could be carcinogenic.
The Government's Committee on Toxicology is assessing a critical report
on the additive after allegations about its safety were raised by
Liberal Democrat MP Roger Williams in the Commons last December. Its
findings will be taken up by the European Food Safety Authority, which
is expected to rule in May on whether Aspartame should be banned.
Coke was first launched as a health tonic at a small chemist's shop
in Atlanta, Georgia, more than 120 years ago. Its inventor, John Pemberton,
a pharmacist, claimed the sugary medicine could treat headaches, impotence
and morphine addiction. It originally had some novel active ingredients:
the coca leaf which produces cocaine, and kola nuts, a source of caffeine.
The coca was soon dropped from its famous "secret formula", but the
drink was a hit. The firm's decision to provide cheap drinks to GIs
serving overseas in the Second World War was a watershed. After they
returned home, its popularity took off. It now operates in nearly
every country in the world, selling 12,500 drinks every second with
its other global brands, such as Sprite, Fanta and Lilt. Its profits
last year were just under $15bn, thanks to a $2bn-a-year marketing
budget which is four times greater than the total annual spending
of the UN's children's programme, Unicef.
According to anti-poverty campaigners, this contrast is greatest in
India, where Coca-Cola's environmental record has come under the greatest
attack. It has invested more than $1bn in India and reputedly controls
more than 50 per cent of its vast soft drinks market.
But in several Indian states, its unquenchable thirst for water has
been blamed for exhausting scarce underground water supplies, causing
crop failures for local subsidence farmers. It takes nearly three
litres of water to make a litre of Coke, and campaigners allege that
in Rajasthan, Uttar Pradesh, Kerala and Maharashtra, the arrival of
Coke bottling plants has led to a sharp fall in water availability.
Coca-Cola has responded to these allegations by building "rainwater
harvesting" projects at 26 plants, cutting water use by 25 per cent
and shipping in drinking water to stricken villages. But Dr Sandeep
Pandey, a prominent critic, is unimpressed. "The visible employment
that Coke generates is smaller than the large numbers of hidden and
unorganised people it puts out of business, like the vendors of traditional
Indian fruit drinks and hence the farmers supplying them."
The corporation has faced a similar backlash in Latin America. Raquel
Chavez, who owns a tiny shop in a poor suburb of Mexico City, cost
Coca-Cola $68m in fines last November for illegally trying to stop
her selling a rival brand. Her local Coke distributor saw she was
stocking a cheaper competitor, a Peruvian brand called Big Cola. He
warned her to drop it, then threatened to take away the fridge the
firm had lent her, and cut off her Coke supplies.
After persuading Mexico's Free Competition Commission to take up her
case, she lodged an action against the company but she says Coca-Cola's
distributors just shrugged her off. "They said they had so many lawyers
and so much money they could do what they wanted."
Last July, the commission ruled that 15 Coke bottlers had violated
anti-monopoly laws in the case, and fined them about $15m. The fines
mounted up. Within weeks, similar cases against Coke were decided,
with 54 Coca-Cola distributors fined about $1m each. Coca-Cola is
now appealing against all these fines.
But the corporation has been accused of being implicated in far more
violent controversies. In Colombia, eight employees of Coke bottling
plants have been killed by paramilitaries with alleged links to the
government, with a further 48 forced into hiding and 65 getting death
Trades union leaders claim these murders and attacks are part of a
concerted campaign to suppress union activity in Colombia, and are
suing Coca-Cola in the US courts. The company insists it has "normal
relations" with 12 unions in Colombia, including collective bargaining
covering wages and working conditions. "We continue striving to take
a leadership role in ensuring the rights and safety of workers around
the world," the company said last week. Its firm, it insists, is one
of the most heavily unionised multinationals.
Yet Coke is entangled in similar disputes across Asia and the Americas.
In Pakistan, it illegally dismissed employees who called a strike,
and in Turkey, riot police have been accused of violently dispersing
peaceful protests over the sacking of union leaders. In Peru and Chile,
workers at its subsidiaries have gone on strike over complaints about
working hours and intimidation. In Russia, it is accused by War on
Want of opposing union organisation.
Earlier this month, Coca-Cola retaliated. Its chairman, Neville Isdell,
met the UN Secretary General, Kofi Annan, to sign the UN's Global
Compact on human rights and labour relations. But campaigners claim
that global tastes are changing quicker than Coca-Cola's marketing
strategy. Now, they claim, consumers are looking behind the label,
and can force the world's most powerful brand to listen up.
Additional reporting by Tim Gaynor in Mexico City and Sybille Regout
Coke is often credited with creating the modern image of Santa Claus
as a rotund, red-cheeked and white-haired grandfather figure for a
Christmas advertising campaign in the 1930s
After first sponsoring the Olympics in 1928, Coke spent £33m in a
deal for the 2004 games in Sydney and 2008 games in Beijing. Its deal
with the Olympics lasts until 2020. Coke also now dominates football,
paying £25m to sponsor this year's World Cup, and £15m on sponsoring
the English Football League
Tom Jones, Nancy Sinatra and the Supremes were among the first pop
stars hired by Coke, appearing in TV ads during the 1960s. Aretha
Franklin, Elton John and Missy Elliot have since followed.
Coke lost its crown as the world's top seller last Christmas, when
Pepsi was valued at $98.4bn compared to Coca-Cola at $97.9bn
Coca-Cola Blak, the first coffee-flavoured Coke, will be launched
in the US next month. The firm calls it an 'innovative carbonated
New tea drinks, vitamin-enhanced juices and new cherry, lemon and
lime flavours of Diet Coke are planned in Britain this year to stop
the slump in Coca-Cola sales
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