Professional Documents
Culture Documents
The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola. It was invented by Dr. John Smith Pemberton (Pemberton) on May 8, 1886, at Atlanta, Georgia, in USA. The beverage was named Coca-Cola because at that time it contained extracts of Coca leaves and Kola nuts. Frank M. Robinson (Robinson), Pemberton's book-keeper and partner, who came up with the name for the drink, suggested that it be spelt Coca-Cola rather than CocaKola because he thought the two C's would look better while advertising. Robinson designed the now world famous Coca-Cola trademark as well. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves over 1.7 billion servings each day. The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments. The Coca-Cola Company is headquartered in Atlanta, Georgia, United States. Its stock is listed on the NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell 1000 Growth Stock Index. Its current chairman and chief executive is Muhtar Kent.
Acquisitions
The company has a long history of acquisitions. Coca-Cola acquired Minute Maid in 1960, the Indian cola brand Thumbs Up in 1993, and Barq's in 1995. In 2001, it acquired the Odwalla brand of fruit juices, smoothies and bars for $181 million. In 2007, it acquired Fuze Beverage from founder Lance Collins and Castanea Partners for an estimated $250 million. The company's 2009 bid to buy a Chinese juice maker ended when China rejected its $4.2 billion bid for the Huiyuan Juice Group on the grounds that it would be a virtual monopoly. Nationalism was also thought to be a reason for aborting the deal. In 1982 Coca-Cola made its only nonbeverage acquisition, when it purchased Columbia Pictures for $692 million. It sold the movie studio to Sony for $1.5 billion in 1989.
The Coca-Cola Company's Minute Maid group North America offices in Sugar Land Town Square, Sugar Land, Texas, United States
Revenue
According to the 2005 Annual Report,[12] the company sells beverage products in more than 200[13] countries. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion (the latest figure in 2010 shows that now they serve 1.6 billion drinks every day). Of these, beverages bearing the trademark "CocaCola" or "Coke" accounted for approximately 78% of the company's total gallon sales. Also according to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows:
37% in Mexico, India, Brazil, Japan and the People's Republic of China 20% spread throughout the rest of the world
In 2010 it was announced that Coca-Cola had become the first brand to top 1 billion in annual UK grocery sales.
The Explanation
While Coke faced a lot of criticism from health experts and public agencies for targeting school children during 1998-1999, the company received major setback during the European crisis in which school children were the major victims. After the crisis Coke investigated the problem by testing the subject batches for chemicals. The company claimed that the tests showed nothing toxic in the beverages. However to explain the whole crisis, Coke Belgium said that there had been separate errors at two plants.
Of the 200 countries where Coca-Cola is sold, India reportedly has the fastest-growing market, but the adverse environmental impacts of its operations there have subjected the parent company and its local bottlers to a firestorm of criticism and protest. There has been a growing outcry against Coca-Cola's production practices in India, which are draining out vast amounts of public groundwater and turning farming communities into virtual deserts. Suicide rates among Indian farmers whose livelihoods are being destroyed are growing at an alarming rate. Every day for years there has been some form of protest, from large demonstrations to small vigils, against Coca-Cola's abuses in India.
"Three communities in India Plachimada in Kerala, Wada in Maharashtra and Mehdiganj in Uttar Pradesh are experiencing severe water shortages as a result of Coca-Cola's mining of the majority of the common groundwater resources around its facilities. Coke's indiscriminate dumping of waste water into the ground has polluted the scarce water that remains. In Sivagangai, Tamil Nadu, residents are opposing a proposed Coca-Cola facility because of fears that they too will face water shortages and pollution."
There have been numerous public protests of The Coca-Cola Companys operations throughout India, involving thousands of Indian citizens and several non-governmental organizations. Protests against the Coco Cola factories have taken place in a number of districts including: Mehdiganj near the holy city of Varanasi; Kala Dera, near Jaipur, Rajasthan; Thane district in Maharashtra; and Sivaganga in Tamil Nadu.
The Court recognised that the State as a trustee is under a legal duty to protect natural resources. It considered that these resources, meant for public use, cannot be converted into private ownership. The High Court ordered the plant to stop drawing the groundwater within a month, ruling that the amount of water extracted by the plant was illegal. But at the same time, it ordered the Village Council to renew the license and not interfere with the functioning of the Company as long as it was not extracting the prohibited ground water. In 2005, the divisional bench of the High Court granted permission for the company to extract 500,000 litres from the common ground water per day in the year 2005-2006. The Court also affirmed that the Village Council was not justified in cancelling Coca Colas licence to operate until a full scientific assessment had been made of the facts. In August 2006, The Kerala State Pollution Control Board ordered a ban on the manufacture and sale of Coca Cola in the State questioning the safety of the product itself, based on allegations that it contained pesticides and harmful chemicals in a report by an NGO, the Centre for Science and Environment, New Delhi. Nevertheless, water remains a problem for the villagers. With its groundwater still polluted, Plachimada now gets its drinking water through pipes, that provide water for only a few hours once in two days, and through tanker lorries which also arrive once in two days. Fifteen tankerlorries of water are supplied by the government, and 15 more by the company. Villagers remain particularly concerned at the pollution of the scarce remaining groundwater and land which they blame on the discharge by the Coca-Cola company of its waste into the surrounding fields. Although the Coca Cola factory in Plachimada has remained closed since 2004, locals are not satisfied with simply closing the plant; they want justice for the damage caused to health and the environment. As the protestors complain:Its true that the company is not functioning, but that is not enough. We must get compensation for all the crimes committed by the company.
For farmers, loss of groundwater translated directly into loss of income. For women, it meant having to walk an additional 5 to 6 kilometers just to fetch water to meet the basic daily needs of the family. For many children in Kala Dera, it meant leaving schools to provide a much needed helping hand doing household chores since the women had additional burdens. The community in Kala Dera organized itself to challenge the Coca-Cola company for the worsening water conditions - through extraction and pollution - and demanded the closure of the Coca-Cola bottling plant. The company, in usual fashion, denied any wrongdoing, blaming "outsiders" for the increasing local community opposition.
Forced Assessment Validates Community Concerns The community of Kala Dera, as well as the villages of Plachimada and Mehdiganj in India that are opposing Coca-Cola bottling plants, have enjoyed significant international support. And most notable in lending support have been college and university students across the globe, and in particular, the US, UK and Canada - some of Coca-Cola's larger markets. One of the successful campaigns was at the prestigious University of Michigan in the US, which, after a sustained student-led campaign in which the India Resource Center represented the India issues, placed the Coca-Cola company on probationon January 1, 2006. The university also mandated that Coca-Cola agree to an independent assessment of its operations in India if it ever wanted to do business with the university. The assessment, paid for by Coca-Cola and conducted by the Energy and Resources Institute (TERI), only looked at six bottling plants in India and was released in January 2008. The assessment was a scathing indictment of Coca-Cola's operations in India. Validating the concerns of the communities campaigning against Coca-Cola, the assessment noted that Coca-Cola approached its operations in India from a "business continuity" perspective that ignored the impacts on the community.
Stop Using Groundwater in Kala Dera Some of the most disturbing findings in the assessment concerned Coca-Cola's bottling plant in Kala Dera. Confirming that Coca-Cola's bottling plant in Kala Dera operated in an "overexploited" groundwater area and the Coca-Cola's bottling plant had "significant impacts", the assessment noted that "the plant's operations in this area would continue to be one of the contributors to a worsening water situation and a source of stress to the communities around." The assessment made four recommendations with regard to the Coca-Cola bottling plant in Kala Dera, making it clear that Coca-Cola could no longer utilize the overexploited groundwater resource in Kala Dera: 1. 2. 3. 4. Transport water from the nearest aquifer that may not be stressed Store water from low-stress seasons Relocate the plant to a water-surplus area Shut down this facility
The community in Kala Dera, needless to say, welcomed the recommendations. Unfortunately, they still wait for Coca-Cola to make good on the recommendations made by the assessment that Coca-Cola itself paid for.
Coca-Cola's Response - Unethical and Dishonest Coca-Cola has had seven months to respond to the findings on Kala Dera. We have not seen much action on the part of Coca-Cola that address the concerns raised in the assessment. In fact, what we have seen much of, is an unethical and dishonest campaign by the Coca-Cola company in an attempt to misrepresent the issues. Continued Misery in the Face of Certainty
Kala Dera lies in an overexploited groundwater area and access to water has been difficult. Summers are particularly intense in the area, and summers are when water shortages are most acute. Ironically, summer months are also when Coca-Cola reaches its peak production, and it is in the summer months that the Coca-Cola bottling plant in Kala Dera extracts the most water, making already existing water shortages even worse. At the very least, the Coca-Cola company could have stopped extraction of water this summer, knowing very well the conclusions of the assessment. With facts in hand, the Coca-Cola company has chosen to continue its operations, knowingly contributing to the misery of thousands of people. On the one hand, Coca-Cola talks a good talk about being a good corporate citizen. Yet, it continues to deplete groundwater causing undue hardships to the community even after it has been told to stop doing so, that too by a study funded by the company itself. Farmer in Kala Dera Shows Increased Electric Bill from Pumping Water from Depleted Groundwater Criminal Negligence or Straight Incompetence Prior to locating a bottling plant in Kala Dera, Coca-Cola is supposed to have conducted an Environmental Impact Assessment that looks at a variety of current conditions and potential impacts if the plant is built and operated. The Coca-Cola company has refused to share the environmental impact assessment it conducted for Kala Dera (or any other plants in India), citing "legal and strategic confidentiality" reasons. However, the Central Ground Water Board of India had already assessed the groundwater in and around Kala Dera to be "overexploited" in 1998. The Coca-Cola company started operations in 2000 - two years after the Indian government agency had already found it to be "overexploited". Did the Coca-Cola company know that the groundwater was overexploited and still built and operated its plant? If the company knew that the Kala Dera groundwater area was overexploited, then starting a water intensive plant borders on criminal negligence, if not criminal negligence itself. And how could the company, which describes itself as a "hydration" company, not know that the Central Ground Water Board of India had already assessed the groundwater as overexploited? Coca-Cola Forced to Agree to Assessment The Coca-Cola company says that it "voluntarily participated" in the assessment even though the University of Michigan insisted that Coca-Cola agree to an assessment if it wanted to do business with the University of Michigan.
The company goes on further to state that "our voluntary participation in the TERI assessment reflects our commitment to transparency and continuous improvement." If Coca-Cola were committed to transparency, we would suggest they make a good start by sharing the Environmental Impact Assessment that they conducted for Kala Dera and rest of the bottling plants in India. And as for their commitment to "continuous improvement", Coca-Cola should start with implementing one of the four recommendations made by the assessment in regards to the CocaCola bottling plant at Kala Dera. Coca-Cola Fails to Mention Shut Down Plant Recommendation In its letter to the University of Michigan after the assessment, the company fails to mention the fourth recommendation made by the assessment - to shut down the bottling plant. Coca-Cola Does Not Meet its Own Standards In the same letter, the company states that their plants "on an overall basis are meeting our own more stringent internal standards." One of the shocking findings of the assessment was that of the six plants surveyed, in not one did the plant meet the Coca-Cola company standards for waste management, known as the TCCC standards! What is the point of having Coca-Cola company standards if not a single plant meets them? Coca-Cola Not in Compliance with Government Regulations In the same letter, the company states that "its bottlers are in compliance with the standards of relevant India government and regulatory agencies." Again, the assessment found that the treated effluent discharge at none of the six plants surveyed met all the standards of the relevant Indian government and regulatory agencies. The assessment states that the treated effluent discharge at the plants "mostly met the effluent discharge requirements". In Kala Dera, the company has announced that it has recharged five times the amount of water it has used. When asked to back it up with numbers, Coca-Cola does not provide any. In fact, in the letter to the University of Michigan, Coca-Cola states that they "will install measuring devices that will verify the amount of water recharged." If they do not have measuring devices installed to verify the amount of water recharged, how can they make a claim of recharging five times the water that they have extracted? People across Rajasthan are well versed in rainwater harvesting, and many communities have been harvesting rainwater long before Coca-Cola started. In fact, the Coca-Cola company started rainwater harvesting initiatives in India as a response to the growing campaigns against its water mismanagement. The community in Kala Dera has long maintained that Coca-Cola's rainwater harvesting structures do not work.
Even the TERI assessment, which looked at Coca-Cola's CSR initiatives in Kala Dera, notes that "all the recharge shafts that were randomly visited were found to be in dilapidated conditions."