Company Profile

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:

42% in the United States

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.

COKE CRISIS IN GUATEMALA

"Coca-Cola Sued for 'Campaign of Violence' in Guatemala," International Rights Advocates, a non-profit human rights organization, and the Conrad and Scherer law firm filed a new civil lawsuit against The Coca-Cola Company. The case was first filed in the State Supreme Court in New York on February 25, 2010, and in April it was moved to the U.S. District Court of the Southern District of New York. A lawsuit was filed on behalf of eight plaintiffs in the Supreme Court of the State of New York against The Coca-Cola Co. and Coke processing and bottling plants in Guatemala. This case involves charges of murder, rape and torture. The plaintiffs include union leaders and family members. This case has been brought in New York State because plaintiffs and other victims of human rights abuses lack access to an independent and functioning legal system within Guatemala, a country with a corrupt judiciary which has been undermined by the intimidation and murder of witnesses, prosecutors, lawyers and judges. This case also presents evidence of Coca-Cola's direct involvement in trying to suppress the facts. Coca-Cola used the leverage of security for the family of Plaintiff Jose Palacios to try to get him to waive his employment rights and resign from his union. The case involves a campaign of violence that includes rape, attempted murder and murder against two Guatemalan trade unionists and their families. The two trade unionists are Jose Armando Palacios, who was forced to flee to the U.S. in early 2006, and Jose Alberto Vicente Chavez, whose son and nephew were murdered and whose daughter was gang raped on March 1, 2008. The Guatemalan workers who say they endured a 'campaign of violence' by people working on behalf of bottling and processing plants Coke owns or owned there after they engaged in union activities. If a court does find Coca-Cola guilty, the case could bring the company to task for the anti-labor violence and further establish a legal precedent for international corporate responsibility.

Crisis faced by coke in Europe

On June 13, 1999, Coca-Cola (Coke) recalled over 15 million cans and bottles after the Belgian Health Ministry announced a ban on Coke's drinks, which were suspected of making more than 100 school children ill in the preceding six days. This recall was in addition to the 2.5 million bottles that had already been recalled in the previous week. The company's products namely Coke, Diet Coke and Fanta had been bottled in Antwerp, Ghent and Wilrijk, Belgium while some batches of Coke, Diet Coke, Fanta and Sprite were also produced in Dunkirk, France. Children at six schools in Belgium had complained of headache, nausea, vomiting and shivering which ultimately led to hospitalization after drinking Coke's beverages. Most of them reported an unusual odor and an off- taste in the drink. There were cases of poisoning of young people who had stomach pain after drinking coke. Governments of France, Spain and Luxembourg also banned cokes products. The entire episode left more than 200 Belgians and French, mostly school children, ill after drinking the Coke produced at Antwerp and Dunkirk. The company had to assure its British customers that the products made in its UK factories were safe. By June 15, 1999, Coke had recalled about 30 million cans and bottles, the largest ever product recall in its 113-year history. For the first time, the entire inventory of Cokes products from one country was banned from sale. The recall had a significant negative impact on cokes financial performance. The Belgium recall was one of the worst public relations problems in Cokes history. It was also alleged that the company had information about people who had become ill weeks prior to the above incidents.

Exclusive School Contracts

The exclusive school contracts allowed Coke exclusive rights to sell its products - soda, juices, and bottled water - in all the public schools of a district. Under the plan, the schools got $350,000 as an "up front" money and a percentage which ranged from 50 percent to 65 percent of total 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.

COCA COLA CRISIS IN INDIA

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.

Case against Coca-Cola in Plachimada, Kerala State

The protests by villagers from Plachimada, in the southern state of Kerala have shown the strength of community-led activities, even against this global multi-national company. Through round-the-clock vigils outside the factory gates, they have managed to temporarily shut down Coca-Colas local bottling plant. As of early 2007, the factory had remained closed for a nu mber of years and a combination of community action and legal redress was aimed at permanent closure. Background to Coca Cola ground water exploitation case in Kerala In 1999, the Hindustan Coca-Cola Beverages Private Limited, a subsidiary of the Atlanta based Coca-Cola company, established a plant in Plachimada, in the Palakkad district of Kerala, southern India. The Perumatty Village Council gave a licence to the company to commence production in 2000. Coca Cola drew around 510,000 litres of water each day from boreholes and open wells. For every 3.75 litres of water used by the plant, it produced one litre of product and a large amount of waste water. Two years after production began protest by local residents became common place. Local communities complained that water pollution and extreme water shortages were endangering their lives. In 2003, women from the Vijayanagaram Colony in the village of Plachimada, protested that their wells had dried up because of the over exploitation of groundwater resources by the Cocacola plant. They complained that they now had to walk nearly five kilometres twice a day to fetch water. They also argued that the little which was left was undrinkable and when used for bathing the water burned their eyes and lead to skin complaints. Aside from these health issues, the depletion of groundwater resources also affected the ability of local residents to raise their crops of rice and coconuts. In April 2003, the Perumatty Grama Panchayat (Village Council) refused renewal of CocaColas licence to operate on the grounds that it was not in the public interest to renew the licence stating: the excessive exploitation of ground water by the Coca-Cola Company in Plachimada is causing acute drinking water scarcity in Perumatty Panchayat and nearby places The Village Council considered revocation of the licence to be necessary in order to protect the interests of local people. In December 2003, the Village Councils decision was challenged in the High Court of Kerala State. The Court considered two issues: the question of the over exploitation of ground water, and the justification for the Village Councils decision to revoke the licence.

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.

Kala Dera - Thirsting from Coca-Cola

Kala Dera is a large village outside the city of Jaipur where agriculture is the primary source of livelihood. Coca-Cola started its bottling operations in Kala Dera in 2000, and within a year, the community started to notice a rapid decline in groundwater levels. In the latest government data obtained by the India Resource Center, groundwater levels in Kala Dera have continued spiraling downwards, falling another 3.6 meters (11.8 feet) in just one year, between November 2009 and November 2010. Coca-Colas bottling operations have had a spectacular impact on the groundwater resources in the area. In the 10 years before Coca-Cola started operations in Kala Dera (1990-2000), groundwater levels fell just 3.94 meters (12.9 feet). In the 10 years since Coca-Cola started operations (2000-2010), groundwater levels have plummeted 25.35 meters (83.2 feet). Coca-Cola started operations in Kala Dera in 2000, even though the areas groundwater reserves were declared as over exploited by the government in 1998.

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.

Unusable Well in Kala Dera Showing Depleted Water Level

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."