Criticism of Coca-Cola

The Coca-Cola Company, its subsidiaries and products have been subject to sustained criticism by both consumer groups and watchdogs, particularly since the early 2000s. Allegations against the company are varied and criticism has been based around; possible health effects of Coca-Cola products, questionable labour practices (including allegations of involvement with paramilitary organisations in suppression of trade unions), the company's poor environmental record, perception of the companies engagement in monopolistic business practices, questionable marketing strategies and violations of intellectual property rights. Perception of the company as behaving unethically has led to the formation of pressure groups such as "Killer Coke", boycotts of Coca-Cola and related products and lawsuits.

Health effects

Acidity and tooth decay

Numerous court cases have been filed against the Coca-Cola Company since the 1940s alleging that the acidity of the drink is dangerous. In some of these cases, evidence has been presented showing Coca-Cola is no more harmful than comparable soft drinks or acidic fruit juices. Frequent exposure of teeth to acidic drinks increases the risk of tooth damage through dental erosion.^[1][2] This form of tooth decay is unrelated to dental caries.^[3]

High fructose corn syrup

High fructose corn syrup was rapidly introduced in many processed foods and soda drinks in the US over the period of about 1975–1985. Since 1985 in the U.S., Coke has been made with high fructose corn syrup instead of sucrose to reduce costs. One of the reasons this has come under criticism is because the corn used to produce corn syrup often comes from genetically altered plants.^[4] Some nutritionists also caution against consumption of high fructose corn syrup because of possible links to obesity and diabetes.^[5] High fructose corn syrup has been shown to be metabolized differently than sugar by the human body.^[6]

This causes problems with Coke's distribution and bottling network, because specific franchise districts are guaranteed an exclusive market area for Coke products. Mexican-made Coca-Cola may often be found for sale in stores catering to the Hispanic immigrant community. Kosher for Passover Coke is also made with cane sugar, rather than corn syrup, due to the special dietary restrictions for observant Jews. Some Orthodox Jews do not consume corn during the holiday. Bottled with yellow caps, this variant can be found in some areas of the US around April.^[7]

India secret formula ban

Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA).^[8] In 1993, the company (along with PepsiCo) returned after the introduction of India's Liberalization policy.^[9]

Environmental issues

Cartoon by Carlos Latuff

In India, there exists widespread concern over how Coca-Cola is produced. In particular, it is feared that the water used to produce Coke may contain unhealthy levels of pesticides and other harmful chemicals. It has also been alleged that due to the amount of water required to produce Coca-Cola, aquifers are drying up and forcing farmers to relocate.^[10]

Pesticide use

In 2003, the Centre for Science and Environment (CSE),^[11][12] a non-governmental organisation in New Delhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants PepsiCo and Coca-Cola, contained toxins including lindane, DDT, malathion and chlorpyrifos — pesticides that can contribute to cancer and a breakdown of the immune system. Tested products included Coke, Pepsi, and several other soft drinks (7Up, Mirinda, Fanta, Thums Up, Limca, Sprite), many produced by The Coca-Cola Company.

CSE found that the Indian produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European Union regulations; Coca Cola's 30 times. CSE said it had tested the same products in the US and found no such residues.

Coca-Cola and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world. David Cox, Coke's Hong Kong-based communications director for Asia, accused Sunita Narain, CSE's director, of "brandjacking" — using Coke's brand name to draw attention to her campaign against pesticides. Narain defended CSE's actions by describing them as a natural follow-up to a previous study it did on bottled water.^[13]

In 2004, an Indian parliamentary committee backed up CSE's findings, and a government-appointed committee was tasked with developing the world's first pesticide standards for soft drinks. Coke and PepsiCo oppose the move, arguing that lab tests aren't reliable enough to detect minute traces of pesticides in complex drinks like soda.

The Coca-Cola Company has responded that its plants filter water to remove potential contaminants and that its products are tested for pesticides and must meet minimum health standards before they are distributed.^[14]

Coca-Cola had registered a 11 percent drop in sales after the pesticide allegations were made in 2003.^[15]

As of 2005^[update], Coke and Pepsi together hold 95% market share of soft-drink sales in India.^[13]

In 2006, the Indian state of Kerala banned the sale and production of Coca-Cola, along with other soft drinks, due to concerns of high levels of pesticide residue^[16] On Friday, September 22, 2006, the High Court in Kerala overturned the Kerala ban ruling that only the federal government can ban food products.^[17]

Water use

Environmental degradation in the form of depletion of the local ground water table due to the utilisation of natural water resources by the company poses a serious threat to many communities.

In March 2004, local officials in Kerala shut down a $16 million Coke bottling plant blamed for a drastic decline in both quantity and quality of water available to local farmers and villagers.^[13]

In April 2005, Kerala's highest court rejected water use claims, noting that wells there continued to dry up last summer, months after the local Coke plant stopped operating. Further, a scientific study requested by the court found that while the plant had "aggravated the water scarcity situation," the "most significant factor" was a lack of rainfall. Critics respond that Coke shouldn't be locating bottling plants in drought-stricken areas.^[13] In Plachimada, Coca-Cola is allegedly responsible for creating problems for communities by creating severe water shortages and polluting the groundwater and soil, destroying farms by draining them out completely. The plant here used about 900,000 liters of water last year, about a third of it for the soft drinks, the rest to clean bottles and machinery. It is drawn from wells at the plant but also from aquifers Coca-Cola shares with neighboring farmers. The water is virtually free to all users. These farmers who have been protesting say their problems began after the Coca-Cola factory arrived in 1999.

The company has been trying to regain the plant's license, fighting a case that has gone all the way to India's Supreme Court.^[13]

Near the holy city of Varanasi in northeastern India, a local water official blames a Coke plant — which has been the scene of many protests by NGOs and local residents — for polluting groundwater by releasing wastewater into surrounding land. A Coke official confirms there had been a drainage problem with treated wastewater several years ago but says the company built a long pipeline to correct it.^[13]

Indian environmental activist Vandana Shiva has stated that it takes nine litres of clean water to manufacture a litre of Coke^[18] though Coca-Cola says it is only an average of 3.12 litres.^[19]

The case has been appealed and a decision is pending. Coca-Cola has set up a page to rebut these charges at this site.

India

Coca-Cola's operations in India have come under intense scrutiny as many communities are experiencing severe water shortages as well as contaminated groundwater and soil that some assert^[20] are a result of Coca-Cola's bottling operations. A massive movement has emerged across India to hold the Coca-Cola company accountable for its actions. The state of Kerala imposed a ban of colas from the state only to be quashed by Coca Cola; the matter is pending in the supreme court.^{[citation needed]} The Plachimada plant in Kerala state, one of Coca-Cola's largest bottling facilities in India, has remained shut for 17 months now because the village council has refused to renew its license, blaming the company for causing water shortages and pollution.

In Sivaganga District of Tamil Nadu state there were several protests and rallies opposing the proposed Coca Cola bottling plant in fear of water depletion and contamination.^[21][22] The president of the Gangaikondan panchayat, Mr. V. Kamson died under mysterious circumstances^[vague] two days after going back and forth in his resentment against the upcoming Coca-cola bottling plant in the village. When asked about the conflicting statements, he said: "I am under immense pressure from the public, police and other quarters. So I have issued this statement."^[23] Five other Indian states have announced partial bans on the drinks in schools, colleges and hospitals.^[24]

Packaging

Packaging used in Coca-Cola's products has a significant environmental impact but the company strongly opposes attempts to introduce mechanisms such as container deposit legislation.^[25]

Economic business practices

Monopolistic

In 2000, a United States federal judge dismissed an antitrust lawsuit filed by PepsiCo Inc. accusing Coca-Cola Co. of monopolizing the market for fountain-dispensed soft drinks in the United States.^[26]

In June 2005, Coca-Cola in Europe formally agreed to end deals with shops and bars to stock its drinks exclusively after a European Union investigation found its business methods stifled competition.^[27]

In November 2005, Coca-Cola's Mexican unit - Coca-Cola Export Corporation - and a number of its distributors and bottlers were fined $68 million for unfair commercial practices. Coca-Cola is appealing the case.^[28]

Marketing

In 1993, US investigative journalist Mark Pendergrast published For God Country and Coca Cola (ISBN 0465054684), an in-depth study of the marketing phenomenon which had made Coca-Cola synonymous with US culture.

In 2004, the British government launched a wide-ranging review into food promotion and childhood obesity. One survey found that Coca-Cola broadcasted a high proportion of their advertisements during children's television.^[29] The company removed its branding from vending machines in Scottish schools in December 2003, replacing it with a graphic of an urban scene.^[30]

"Channel stuffing" settlement

Coca-Cola Co, on July 7, 2008 compromised to pay $137.5 million (£69.4 million) to settle an October 2000 shareholder lawsuit. Coca-Cola was charged in a U.S. District Court for the Northern District of Georgia, with "forcing some bottlers to purchase hundreds of millions of dollars of unnecessary beverage concentrate to make its sales seem higher." Institutional investors, led by Carpenters Health & Welfare Fund of Philadelphia & Vicinity, accused Coca-cola of "channel stuffing," or artificial inflation of Coca-Cola's results which gave investors a false picture of the company's health.^[31] The settlement applies to Coca-Cola common stock owners from Oct 21, 1999 to March 6, 2000.^[32]

Nazi Germany and World War II

World War II and Nazi-Germany Interaction

In common with many large American companies, Coca-Cola had a controversial relationship with Germany before and during World War II. A division of the company continued to operate in Germany during the war, but were unable to import the syrup needed for production of Coca-Cola from the United States.

Before and during World War II, Coca-Cola adopted an apparent policy of ignoring the practice of eugenics and anti-Semitism by Nazi Germany, according to a 2000 book by Mark Pendergrast. Several of Coke's top executives in Germany were public members of the National Socialist German Workers Party, commonly known as the Nazi Party. When the United States entered World War II, Coke began to represent its product in the US as a patriotic drink by providing free drinks for soldiers of the United States Army,^[33] thus allowing the company to be exempt from sugar rationing.^[34]

The United States Army permitted Coca-Cola employees to enter the front lines as "Technical Officers" when in reality they rarely if ever came close to a real battle. Instead, they operated Coke's system of providing refreshments for soldiers, who welcomed the beverage as a reminder of home. As the Allies of World War II advanced, so did Coke, which took advantage of the situation by establishing new franchises in the newly occupied countries.^[33]

Coca-Cola set up bottling plants in several locations overseas to assure the drink's availability to soldiers, setting the stage for the company's post-war overseas expansion. The popularity of the drink exploded as US soldiers returned home from the war with a taste for the drink.^[33]

At the same time, according to Jones E and Ritzman F. in Coca Cola Goes to War, "the soft drinks giant from Atlanta, Georgia collaborated with the Nazi-regime throughout its reign from 1933–1945 and sold countless millions of bottled beverages to Hitler’s Germany." ^[35]

Fanta, a product developed in Germany due to shortages of supplies to make Coca-Cola, was merged into the Coca-Cola brand line following the end of the war.

The Bigio family case

Following two years of negotiations with Coca-Cola HQ in Atlanta, the Bigio family, living in Canada, filed a lawsuit against Coca-Cola on April 21, 1997 in the United States District Court for the Southern District of New York (Foley Square) Case #97-CV-02858.^[36][37] The suit alleges Coke knowingly purchased Bigio family property in Egypt after the Egyptian government illegally seized it from them in the 1960s because they were Jewish. The suit was filed in US federal court under the Alien Tort Statute, which gives non-US citizens the right to sue in US courts for alleged violations of international law. The case may be the first of many court battles in the United States brought by Jews seeking to recover confiscated property from Arab countries. "At a minimum, a private corporation that acts in concert with a foreign government is liable for violations of international law," asserted Grant Vinik, a Washington, DC attorney who, along with Nat Lewin, is representing the Bigio family.^[36]

Starting in 1938, the Bigio family factories in Egypt were licensed by Coca-Cola to produce several products such as bottle caps. In addition, Coca-Cola had a bottling plant on property it had rented from the Bigios. In 1962, the government of Gamal Abdel Nasser confiscated the land and factories, transferring it to state-owned companies. "When we left Egypt, we left with $5 each," said Bigio.^[36] After Nasser's death in 1970 privatization began, which meant state-owned property could be sold to private bidders in 1993. In 1994 the Bigios warned Coca-Cola not to proceed with the acquisition of the property without compensating the family. Coca-Cola went ahead with that acquisition in 1994 without compensating the Bigios. "They [Coke] knew they were buying nationalized and stolen assets," Bigio charged.^[36]

Coke has argued that the case should be dismissed because the court lacked jurisdiction, and that the case was old, as the family had been expropriated of their factories and real estate assets some 25 years before.

Employee issues

Racial discrimination

In November 2000, Coca-Cola agreed to pay $192.5 million to settle a class action racial discrimination lawsuit and promised to change the way it manages, promotes and treats minority employees in the US. In 2003, protesters at Coca-Cola's annual meeting claimed that black people remained underrepresented in top management at the company, were paid less than white employees and fired more often.^[38] In 2004, Luke Visconti, a co-founder of Diversity Inc., which rates companies on their diversity efforts, said: "Because of the settlement decree, Coca-Cola was forced to put in management practices that have put the company in the top 10 for diversity."^[39]

Bottling plant murders

Guatemala

In the 1970s, a Coca-Cola franchised bottling plant in Guatemala suffered a spate of mysterious murders of union-affiliated employees leading to the non-renewal of the bottling plant's license in 1981. "Coca-Cola found a new owner, and following repair work and construction on the plant, work resumed at the Guatemala bottling plant on March 1, 1985." ^[40] The Company's decisions were made after pressure from several groups, including a shareholder resolution filed in 1979.^[40] The Company argued that "it had no right to interfere in labor disputes between independent parties and asserting that such an intrusion would be improper."^[40]

On February 25, 2010, a new lawsuit was launched on behalf of 8 plaintiffs against The Coca-Cola Co. and Coke processing and bottling plants in Guatemala, with charges of murder, rape, and torture of union leaders and their families.^[41] The plaintiffs were victims of employees associated with Industria de Café SA, or Incasa, which operates an instant coffee and Coca-Cola bottling plant in Guatemala City. The plaintiffs said Incasa “is or was previously owned by Coca-Cola.” ^[42]

Colombia

Panamerican Beverages (Panamco), Coca-Cola's main bottler in Latin America, has been criticized for its relationship with unions. In Colombia, it has been alleged that the bottling company hired paramilitary mercenaries to assassinate union leaders. These charges have resulted in several court cases and boycott actions against The Coca-Cola Company.

In July 2001, the United Steelworkers of America and the International Labor Rights Fund filed suit in US court against Coca-Cola and some bottlers in Colombia on behalf of their workers.^[43] This lawsuit was titled Sinaltrainal v. Coca-Cola. According to the plaintiffs, the companies "hired, contracted with or otherwise directed paramilitary security forces". The companies denied the charges. In April 2003 District Judge Jose E Martinez in Miami excluded The Coca-Cola Company and its Colombian unit because its bottling agreement did not give it "explicit control" over labor issues in Colombia.

In January 2004, a New York City-based fact-finding delegation, a self-initiated group that included some city officials in a personal capacity,^[44] confirmed the workers' allegations. They found:

To date, there have been a total of 179 major human rights violations of Coca-Cola's workers, including 9 murders. Family members of union activists have been abducted and tortured. Union members have been fired for attending union meetings. The company has pressured workers to resign their union membership and contractual rights, and fired workers who refused to do so.

Most troubling to the delegation were the persistent allegations that paramilitary violence against workers was done with the knowledge of and likely under the direction of company managers. The physical access that paramilitaries have had to Coca-Cola bottling plants is impossible without company knowledge and/or tacit approval....

The bottler and The Coca-Cola Company deny these allegations. Specifically, The Coca-Cola Company stated in its 2004 proxy^[45]

Two different independent inquiries in Colombia —a judicial inquiry by a Colombian Court, and an inquiry by the Colombian Attorney General's office— examined the specific issue of whether managers at a bottling plant were complicit in the murder of a trade unionist. They found no evidence to support the allegation. Further, based on internal investigations conducted by our Company and by our bottling partners, we are confident that allegations the bottlers engaged paramilitaries to intimidate trade unionists are false.

The allegations made against us in Colombia are not merely false; they are repugnant to all of us at The Coca-Cola Company. We agree with the proponents that our Company must clearly demonstrate that we and our bottling partners support human and labor rights and oppose all forms of violence. Our desire is for Coca-Cola to be seen as part of the solution to some of the business issues in Colombia today. We are convinced our current approach will allow for that outcome.

Critics argue that, whatever their source, these assassinations seem to have been helpful to Coca-Cola in eliminating agitators from their bottling plants.

The Coca-Cola Case is a feature-length documentary by the National Film Board of Canada about the situation.^[46]

Since 2003, the Campaign to Stop Killer Coke, directed by Ray Rogers, of Corporate Campaign Inc. (CCI), has successfully urged numerous unions and universities to boycott Coke products as part of a corporate campaign strategy to keep pressure on Coca-Cola to address these issues and make restitution to the victims and their families.

SINALTRAINAL lawsuit

Colombian trade union SINALTRAINAL (National Union of Food Industry Workers) called for an international boycott of Coca-Cola products because of intimidation, kidnapping and murder of workers in Coca Cola bottling plants by paramilitaries. With the help of the United Steelworkers of America, SINALTRAINAL filed a lawsuit against the Coca Cola Company (Sinaltrainal v. Coca-Cola). On March 31, 2003, the United States District Court for the Southern District of Florida dismissed charges against The Coca-Cola Company because the alleged wrongdoing either occurred in the United States but was too removed from the injury or occurred abroad but did not have a substantial origin within the United States.^[6] Judge Jose E. Martinez allowed the case to go forward against two Coca-Cola bottlers: Bebidas y Alimentos and Panamerican Beverages, but not against Coke itself.^[7] On September 4, 2006, Judge Martinez dismissed the remaining claims against the two bottlers.^[47]

Shareholder resolution attempt (2002)

In 2002, Christian Brothers Investment Services, Inc. submitted, along with other co-filers, a shareholder resolution that called for Coca-Cola to adopt a code of conduct on bottling practices and employee relations. Problems in Colombia were cited, but the proposal called for "clear standards for its suppliers, vendors and bottlers."^[48] The resolution received support from Coca-Cola unions in Colombia, Guatemala, Zimbabwe, the Philippines, and the United States.^[49]

However, Coca Cola's board of directors recommended rejecting the proposal, noting in the proxy: "We believe that the Company's existing policies address substantially all of the concerns raised in this proposal, and that the proposal is therefore unnecessary... For example, both our policy and the Principles specifically provide that we (i) will not condone the exploitation of children, physical punishment or involuntary servitude; and (ii) will pay wages that enable our employees to meet their basic needs."^[50]

Ultimately, shareholders rejected the resolution.

Boycotts and controversies

Anti-Coke banner at the University of Michigan, February 2005.

The boycott example which started in Ireland has continued to spread across the world, with the National Union of Students in Britain voting to support the boycott in April 2005. UNISON, the largest trade union in the UK, also voted to support the boycott at its 2004 National Delegate Conference. ECOSY, the European Young Socialists, a federation of youth wings of all the mainstream socialist and social democratic parties in the EU, voted to support the boycott in March 2005 following a motion from the Irish Labour Youth delegation. Campuses and labor and trade unions in the United States, Italy, France and Canada, amongst others, are also campaigning for the boycott to spread. The University of Michigan and New York University banned Coke products from their campuses, bringing the number to over 23. Several US universities have switched to Pepsi in school-run facilities (not including vending machines, but including eateries and sports arenas) in support of the boycott.

Israel and the Middle East controversies

In 1949, Coca-Cola attempted to open a plant in Israel but was refused a permit. Eager to avoid the [Arab League] boycott and sell to the much larger Arab market, Coca-Cola was content not to sell in Israel. In 1961 the issue came up again when an Egyptian civil servant mistook Amharic writing on a Coca-Cola bottle for Hebrew, and accused Coca-Cola of doing business with Israel. The manager of Egypt's Coca-Cola bottling operations quickly informed the press that Coca-Cola would never do business with Israel; forced to explain this, Coca-Cola officials explained that Israel was too small a market for a Coca-Cola operation.

The issue arose again on April 1, 1966 when Moshe Bronstein, a Tel Aviv businessman, accused Coca-Cola of boycotting Israel to appease its Arab market. The Anti-Defamation League took up this cause in the United States, and questions were raised about Coca-Cola's previous explanation for not operating in Israel: If Coca-Cola could have an operation in Cyprus, whose market was one-tenth the size of Israel's, why then was Israel too small for a Coca-Cola operation? Pressure on Coca-Cola grew, and faced with potential American boycotts, Coca-Cola promised to open a bottling plant in Tel Aviv. In response, the Arab League boycotted Coca-Cola from August 1968 to May 1991, as part of the economic boycott of Israel.^[51]

Along with McDonald's, Coca-Cola has become an international symbol of American culture, and especially of American consumerism. While the company still enjoys widespread popularity, some backlash has occurred, mostly in the form of boycotts in the Middle East. One such instance in 2000 saw a claim that the Coca-Cola label, created in 1886, actually contained hidden anti-Islamic phrases "^[52][53]) in its mirror image in Arabic. The Coca-Cola Company claimed sales dropped 10 to 15% in Egypt after the rumor began spreading in 2000. The controversy became so widespread that the Grand Mufti of Egypt — who has proudly admitted in related interviews that he himself indulges in at least one Coke daily — publicly addressed it, declaring that the logo "does not injure Islam or Muslims."^[52]

In Autumn 2002, a French Tunisian, Tawfiq Mathlouthi, launched a new brand of cola drink, dubbed Mecca-Cola, to protest American foreign policy in the Middle East. Mecca Cola was marketed as a way to combat "America's imperialism … by providing a substitute for American goods and increasing the blockade of countries boycotting American goods."^[54] By 2004, Mecca-Cola fizzled: in France, its biggest market, sales dropped about 10%.^[55]

2010 Polish election campaign

During Polish presidential election campaign 2010 two DJs of Radio "Eska Rock", Wojewodzki and Figurski, recorded a hip-hop song parodying the political usage of funerals of victims of 2010 Polish Air Force Tu-154 crash. The song's most attacked verse referred to burying the dead president among Polish kings at the Wawel castle hill. The authors also parodied the "I love Poland"-style of nationalistic politicians. Refrain criticized the dog-eat-dog approach of political usage of mourning and country-wide grief. The song quickly spread over social networks.^[56]

Coca-Cola responded to the appeals of Polish nationalist activists and announced that its logo will be removed from "Eska Rock" Internet appearance.^[57]

Defense of Marriage Act

In April 2011, the law firm King & Spalding, of which Coca-Cola is a client, dropped the case of defending the Defense of Marriage Act in court on behalf of the United States House of Representatives. It was reported that Coca-Cola had directly intervened to pressure the firm to drop the case, a move that brought heavy criticism upon the firm.^[58] Coca-Cola refused to comment.^[58]

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54. ^ Murphy, Verity (Jan. 8, 2003)."Mecca Cola challenges US rival". BBC.
55. ^ Branding America
56. ^ http://www.indymedia.org.uk/en/regions/world/2010/05/450155.html
57. ^ http://www.tvn24.pl/12690,1654228,0,1,coca_cola-wycofuje-sie-po-rapie-o-kaczynskim,wiadomosc.html
58. ^ ^{a b} Behind A Major Law Firm's Decision To Ditch Its Defense Of DOMA

External links

• Official Killer-Coke Website
• CSE - Down to Earth Magazine, Pesticides in Coke
• Page criticizing Coca-Cola's alleged crimes in India
• The first full exposé of Coca-Cola's social and environmental abuses around the world.
• Stop Killer Coke Article about controversy in Colombia in Dollars & Sense magazine
• Sounding Circle: Anti-Coca-Cola Abusing Water Rights and Poluting Village in India Discussion of water-rights in India.
• Boycott Israel Campaign's Coca-Cola Page
• Cut Coke Campaign, University of Guelph
• Coca-Cola - Get the real facts - Coca-Cola's official website in response to allegations made by the 2007 Channel 4 Dispatches program entitled Dispatches: Mark Thomas on Coca-Cola
• How Coke Affects Your Body
• "Thousand Days and A Dream"Category: Documentary