For decades, the Coca-Cola company has ventured into villages around the globe, assuring that every man, woman and child can consume the sugary, fun hip, bubbly, fizzy, somewhat corrosive drink: Coke©. This cheap, simple but top secret recipe is marketing phenomena.
But the company has also been under fire in the past few years for its business practices. Allegedly the beverages contain pesticides. The company's excessive water use at bottling plants has exacerbated drought conditions in Kerala and elsewhere, (Coke uses 4 liters of fresh water to produce 1 liters of drink). The company has also been accused of disposing toxic wastes into the environment. Coca-cola has been to court to address charges of labor abuses in Columbia. If that weren't enough troubles for the company, here was the press release that was later rescinded by Corporate Accountability International" linking the global giant with murders in Columbia. (The press release was "corrected", but the company or its franchised bottling plants have been linked to murders of union leaders in Colombia).
There have been widespread protests against the company in India, and the movement has been picked up on college campuses as well as in the investment community. The protests sparked the interest of the Wall Street Journal, which published a lengthy piece about the conflicts on the front page today. The article, "How a Global Web of Activists Gives Coke© Problems in India" (byline Steve Stecklow, June 7, 2005)-currently available here --, highlights work spearheaded by Amit Srivasta of India Resource Center. Srivasta drew attention to Coca-Cola© when he wrote an article for Corporate Watch, July 10, 2003 that alleging that the company was polluting and draining water resources in Kerala, India and other places.
The Wall Street Journal article takes an interesting approach in its article. The intended audience seems to be the corporate world, when the author writes about exagerations made by exuberant NGOs (Non-Government Organizations). The Wall Street Journal informs readers in the second paragraph that Mr. Srivasta is a "pony-tailed, 39-year old college dropout."
However turning off the front page, you learn that the Wall Street Journal visited the bottling company in Kerala where Coke© was accused of dumping toxic waste and found that required soil sample testing was not routinely done. As well, reporters found that while the Coca-Cola©corporate website virtuously announced the results of a study that purportedly found a Kerala plant's waste material not hazardous, but that other independent studies concluded the opposite:
"two other government studies of the Kerala waste material, including one by India's highest environmental regulatory authority...found that the material contained high enough levels of cadium, a highly toxic metal, to deem it hazardous."
Mr. Srivasta has been on a college circuit lecturing to college students about Coca-Cola's practices in India. The Wall Street Journal notes that Coke© products have been banned at Oberlin College in Ohio, Carlton College in Minnesota, Bard College in New York and "two colleges in Ireland". A website dedicated to this campaign called www.corporatecampaign.org lists about 60 universities and colleges that are active in boycotting Coke©, and announces that both Hofstra University, Union Theological Seminary, and Rutgers have not renewed contracts with the company. The University of Michigan has found evidence for many of the allegations and will only renew a month to month contract if and when Coca-Cola improves its human rights record.
For it's part Coca-Cola complains that sometimes it's not invited to the campuses, although the schools hold that the company has not engaged them in meaningful discussions.
Coca-Cola will undoubtably come under more scrutiny. A while ago, the Kerala village council (panchayata) ordered a Coke© manufacturing unit off-line in order to conserve water. Although the court recently overruled this decision, which undermines grassroots efforts of villagers to control their own water supply, more strife will no doubt plague the company. Recently a Rajasthan High Court ruled that Coca-Cola (and Pepsi) need to declare pesticide content of their beverages on their labels. This could could influence sales. As well, protests against Coca-Cola's bottling plants have spread to other Indian states - Uttar Pradesh, Rajasthan, Tamil Nadu and Maharashtra.
The movement against Coca-Cola certainly cannot be attributed to one man with a pony-tail and a website, although that's what both the Wall Street Journal article and certain Coca-Cola marketing professionals would have you believe. David Cox, a commmunications director for Asia was quoted by the WSJ saying: "the moral high ground seems to be anyone with a Web site". Cox apparently spent "months in India trying to combat the NGOs allegations with little apparent success."
Despite Cox's nod to futility, the company is astutely attuned to it's image challenge. Coca-Cola speaks defensively to some of allegations here. It sponsored the Asia Corporate Social Forum in 2003, and often speaks at events about global issues such as water. In the style of an elementary school book report, Coca-Cola's statement at one environmental conference said this:
"All living systems need water. People need it. The climate needs it. Plants and wildlife need it. We are all part of the same living system and we all need water...In 2003 alone, we worked with our bottlers to improve water use efficiency system-wide by 7% -- that is, our volume grew by 4% and our use declined 3%...That means that The Coca-Cola Company is able to refresh and hydrate consumers, while also supporting sustainable access to water within communities."
There is another type of corporate activism brewing against Coca-Cola that was highlighted in a story last year by the Guardian on Max Keiser, of KarmaBanque. The man and the company were started when "[a] former stockbroker join[ed] forces with billionaire's son". KarmaBanque is an on-line hedge fund that will purportedly "donate the profits from short-sales in Coke's stock to the 'victims of Coca-Cola's business model in places like India and Colombia." At the time of the article "The aim was to reduce Coca-Cola shares from their current value of [$41 to $22]. Will it work?
Coca-Cola presented at Deutsh Bank yesterday to remind investors that it leads the ready-serve drink industry. It ranks #1 in sales of carbonated beverage, coffee and juice, #2 in sales of tea and sports drinks sales, and #3 in water sales. It posted about 21 billion in sales last year for it's 400 brands, up over 4% from the year before. The stock price is currently $43.87, greater then the highest ever mark of organizations betting against it. Despite Mr. Cox's dour statements about NGO's and the market in India, Coca-Cola is on top of the world and smiling.
