Criticism of Coca-Cola

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Criticism of Coca-Cola has arisen from various groups, concerning a variety of issues, including health effects, environmental issues, and business practices. The Coca-Cola Company, its subsidiaries and products have been subject to sustained criticism by both consumer groups, leftist activists and watchdogs, particularly since the early 2000s.

Health effects[edit]

A link has been shown between long-term regular cola intake and osteoporosis in older women (but not men).[1] This was thought to be due to the presence of phosphoric acid, and the risk was found to be the same for caffeinated and noncaffeinated colas, as well as the same for diet and sugared colas.

Environmental issues[edit]

Pesticide contamination[edit]

In 2003, the Centre for Science and Environment (CSE),[2][3] 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 chlorpyrifospesticides 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.[4]

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.[5]

Coca-Cola had registered an 11 percent drop in sales after the pesticide allegations were made in 2003.[6]

As of 2005, Coke and Pepsi together hold 95% market share of soft-drink sales in India.[4]

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[7] On Friday, September 22, 2006, the High Court in Kerala overturned the Kerala ban,[8] ruling that only the federal government can ban food products.[9]

Water use[edit]

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.[4]

In April 2005, the Kerala High Court[10] 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.

The case has been appealed and a decision is pending.[11] Coca-Cola has set up a page to rebut these charges at a domain that was once owned by its detractors.

Packaging[edit]

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.[12][13]

Economic business practices[edit]

Business practices[edit]

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.[14]

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.[15]

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.[16]

"Channel stuffing" settlement[edit]

Coca-Cola Co, on July 7, 2008 compromised to pay $137.5 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.[17] The settlement applies to Coca-Cola common stock owners from Oct 21, 1999 to March 6, 2000.[18]

Investments and operations in apartheid South Africa[edit]

Coca-Cola entered South Africa in 1938 and, after the beginning of the official white South African government's policy of apartheid or "separate development" beginning in 1948, the company grew rapidly. By the 1980s at the height of racial oppression, with 90% of the market, Coke dominated the soft-drink industry with sales in the hundreds of millions of dollars, accounting for 5% of the parent company's global market. Coke employed 4,500 workers, operating under the racially-segregated housing, workplace, and wages, and was one of the largest employers in the country.[19]

In 1982 in South Africa, black workers asked the community to boycott Coke and called two work stoppages until the company agreed to recognize and bargain with their union, raise its workers' low wages significantly, and share information on who controls their pension fund.[20]

As a result of Coke's economic support of white South Africa and its apartheid system, in the 1980s, it became a major target of organizers across the country against U.S. and corporate economic support for apartheid in the U.S. Boycotts then spread across the country to many universities including Tennessee State, Penn State, and Compton College in California, which established a "Coke Free Campus." Demonstrations were held by the Georgia Coalition and the AFSC at Coca-Cola's Atlanta headquarters.[21][22]

In South Africa, in 1986, the Coca-Cola response was to donate US$10 million to a fund to support improvements of housing and education for black South Africans and to announce "...plans to sell its 30% share of a major bottler and a 55% share of a canning operation within six to nine months." [23] (The company's assets there were estimated at US$60 million, their annual sales were circa US$260 million, and with 4,300 workers one of the largest U.S. employers in South Africa.) However, the movement in the U.S. demanded full divestiture and did not accept the company's offer to sell a major portion of the holdings to a South African firm.[24]

After democratic elections that produced Mandela's majority rule government, Pepsi sought to re-enter the South African market. In fact, "Coke never truly left the country, leading to overwhelming dominance through the rest of the 20th century. Pepsi adhered to different social imperatives and suffered exceptionally low market shares as a result." [25] Indeed, in the late 2000s, Coke's market share of the soft drink market in South Africa was estimated at 95% and Pepsi's at 2%.[26]

Coca-Cola and Catalan language[edit]

40,000 Coca-Cola cans on May 31, 2014, Barcelona
RepteCocacola CAT

In Catalonia, there has been controversy regarding Coca Cola's refusal to print its labels in Catalan. On 12 December 1993, the Platform for the Catalan Language (Plataforma per la Llengua) managed to make a world record by bringing together more than 15,000 empty Coca-Cola cans in Barcelona’s central square Plaça de Catalunya and using them to build a giant sign that read "Let’s label in Catalan". At the time, the organisation adopted the motto: "The Coca-Cola label in 135 languages around the world, but not in Catalan?".[27]

On May 31, 2014 Plataforma per la Llengua, recalling the act of the 12th of December, 1993, collected over 40,000 Coca-Cola cans for making a mosaic with the letters "Etiqueteu en Català!" (Label in Catalan!) in the heart of Barcelona, Catalonia, at Plaça de Catalunya to demand the company label in Catalan after more than 20 years of lawsuits.

Employee issues[edit]

Racial discrimination[edit]

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.[28] 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."[29]

Sinaltrainal v. Coca-Cola Co.[edit]

References[edit]

  1. ^ Tucker KL, Morita K, Qiao N, Hannan MT, Cupples LA, and Kiel DP (October 1, 2006). "Colas, but not other carbonated beverages, are associated with low bone mineral density in older women: The Framingham Osteoporosis Study" (PDF). American Journal of Clinical Nutrition 84 (4): 336–342. PMID 17023723. Retrieved 2008-04-21. 
  2. ^ Centre for Science and Environment, Pesticides in coke
  3. ^ Down to Earth, Magazine, Pesticides in coke
  4. ^ a b c India Resource Center - How a Global Web of Activists Gives Coke Problems in India
  5. ^ Coca-Cola website (2006). "THE COCA-COLA COMPANY ADDRESSES ALLEGATIONS MADE ABOUT OUR BUSINESS IN INDIA". Retrieved June 12, 2006.
  6. ^ Business Standard (2003-10-29). "Coke sales fall 11% on pesticide controversy". Business-standard.com. Retrieved 2012-11-03. 
  7. ^ [1]
  8. ^ Pepsico India Holdings v. State of Kerala, WP(C) Nos. 22140 & 22141 of 2006; Civil Appeal Nos. 819 & 820 of 2007 pending with the Supreme Court. See also the Rajasthan case of Hindustan Coca-Cola Beverages v. Santosh Mittal, Civil Appeal Nos. 1965–1973 of 2008 (2013-10-03)
  9. ^ Thomas, V.M. Indian Court Overturns Coke, Pepsi Ban
  10. ^ Hindustan Coca-Cola Beverages v. Perumatty Grama Panchayat, W.A. No. 2125 of 2003 and W.A. No. 215 of 2004, 2005 (2) KLT 554. See also the case of Pepsico India Holdings v. State of Kerala, WP(C) Nos. 27334 of 2003 & 27736 of 2004, 2007 (2) KLT 835 concerning Kanjikode
  11. ^ Civil Appeal Nos. 4033 & 4034 of 2009
  12. ^ "Shareholder Resolution". proxyinformation.com. Retrieved 2008-12-20. 
  13. ^ See also the case of Hindustan Coca-Cola Beverages v. Sangli-Miraj & Kupwad Municipal Corporation, Civil Appeal Nos. 4917 & 4918 of 2011 (2011-07-04)
  14. ^ "PepsiCo Inc". allbusiness.com. Retrieved 2006-05-21. 
  15. ^ "EU makes Coke throw open fridges". BBC. 2005-06-22. 
  16. ^ "Mexican shopkeeper defeats Coke". BBC. 2005-11-17. 
  17. ^ afp.google.com, Coca-Cola settles stockholder lawsuit with 137 million
  18. ^ uk.reuters.com, Coca-Cola agrees to settlement in shareholder lawsuit
  19. ^ "Coca-Cola in South Africa," The Africa Fund, July 1986, http://africanactivist.msu.edu/document_metadata.php?objectid=32-130-133A
  20. ^ "Coca-Cola: Things Go Worse for Workers." in "The Struggle for Justice in South Africa... and here at home," Washington, D.C., Washington Office on Africa Education Fund, February 1984, p. 6. http://africanactivist.msu.edu/document_metadata.php?objectid=32-130-1000
  21. ^ "African Activist Archive". Africanactivist.msu.edu. Retrieved 2012-11-03. 
  22. ^ "African Activist Archive". Africanactivist.msu.edu. Retrieved 2012-11-03. 
  23. ^ "Coca-Cola Acts to Cut All Ties With S. Africa," Los Angeles Times, September 18, 1986, http://articles.latimes.com/1986-09-18/news/mn-11241_1_south-africa
  24. ^ "African Activist Archive". Africanactivist.msu.edu. Retrieved 2012-11-03. 
  25. ^ "Coke vs. Pepsi: The Cola Wars in South Africa during The Anti-Apartheid Era," by John Kirby Spivey, M.A. Thesis, Georgia State University Department of History, 2009. http://digitalarchive.gsu.edu/history_theses/35
  26. ^ "Coke vs Pepsi in SA - Investment Insights". Moneyweb. Retrieved 2012-11-03. 
  27. ^ "Raising awareness of labelling in one's own language. Coca-Cola in Catalan". Linguamon. Retrieved 4 Dec 2013. 
  28. ^ Ben White (2002-04-18). "Black Coca-Cola Workers Still Angry". Washington Post. 
  29. ^ Annys Shin (2004-06-10). "Foundation Helps Sodexho Counter Discrimination Suit". Washington Post.