Belching Out the Devil (33 page)

 

 

M
exico is
the
Coca-Cola country. This is what the landscape looks like when Coca-Cola invades and occupies a country, this is the view as the smoke clears from a marketing blitzkreig. Mexicans drink more
Coca-Cola products than anyone else on the planet, on average over 135 litres of stuff every year. Per Person.

 

And it is beginning to show. Mexicans are among the fattest people on the planet and are piling on the pounds at a rate that would alarm even Robbie Williams. In 1989 less than 10 per cent of Mexicans were overweight.
¹
That figure is now over 68 per cent and rising.
²
Perhaps it is no coincidence that in the last fourteen years, the consumption of soft drinks has increased by 60 per cent;
³
it is also perhaps no coincidence that Coke spends a fifth of its global advertising budget in Mexico alone.

 

But despite controlling over 70 per cent
⁴
of the $6.5bn Mexican soft drinks industry,
⁵
Coca-Cola wanted more. This is the story of how Coca-Cola and its aggressive marketing were exposed by the determination of one working-class shopkeeper who wouldn't be bullied.

Arriving in Mexico City I start by visiting a man who I hope can explain the basics of why Mexico is plumping up. His name is Alejandro Calvillo and he founded El Podor del Consumidor - the Power of the Consumer - which runs a campaign called Dump the Soda. He has spent some time and thought trying to answer the question ‘how did they get to be so big?' The ‘they' in this case refers both to Coca-Cola and its drinkers.

 

Alejandro operates out of a shared building set in a quiet cobbled alleyway along the road from a squat church. Other NGOs work here too and Alejandro has his office set in the communal garden. He used to work for Greenpeace before leaving to form his own campaigning group, taking the compulsory environmentalist beard with him - though it is
trimmed enough to reveal a lean and kind face. When he started El Poder del Consumidor he went back to basics. ‘We began with a review at the office of information. We had a shock. It's terrible what's happening in Mexico. We found Mexico is the second-highest country in the world for obesity.'

 

But it isn't just the adult statistics that are alarming. More worryingly, the number of children between five and eleven who are obese or overweight has increased by 40 per cent in seven years. And El Podor del Consumidor lays the blame for Mexico's obesity problem on the soft drinks industry, ‘Sodas have become the main source of refined sugar intake among the Mexican people and therefore the main responsibility for the current intake that has lead to overweight problems and obesity.'

‘So what we've seen here is a quite big explosion, ‘ I say.

‘Yes.'

‘In quite a short time.'

‘Yes…and in this panorama Coke sell 12 per cent of all their world sales in Mexico.'

And Mexico makes up just 1.65 per cent of the world's population.

 

Alejandro explains that one of the factors in the popularity of solft drinks is Mexico's lack of clean available drinking water, ‘water fountains in schools in particular. If children can't have water they buy sodas.' And this is a country where 80 per cent of schools have no drinking water.
⁶
For the majority of children, soda consumption isn't a choice.

 

Coke's dominance of this market might be…well, how can I put this sensitively…it can't hurt to have the ex-President of Coca-Cola Mexico as the President of Mexico. Vicente Fox was the man who did that very thing, rising through the Coca-Cola system before branching out into non-drink-based politics.

But the big reason Coca-Cola has got such a hold here is the combination of advertising and aggressive marketing practices. Coke spends a fifth of its annual advertising and marketing budget in Mexico alone,
¹⁰
or if we ‘do the math', that's USD$4.54 for every Mexican man woman and child to persuade them to consume kilos of sugar every year. Let us pray heroin dealers never get an advertising budget.

 

Just as Coke's advertising budget is huge, so its sales teams are trained to work aggressively - to the extent of illegality. The Coca-Cola Export Corporation (a wholly owned subsidiary of the Atlanta-based Coca-Cola Company) and its Mexican bottlers have been found guilty of unfair monopoly practices by the Mexican Federal Competition Commission and fined the maximum penalty thanks in large part to a small shop owner called Raquel Chavez and a cheeky newcomer into the Mexican cola market, Big Cola.

 

When Peruvian drinks company, AjeGroup launched its star product in Mexico nobody, least of all Coca-Cola, predicted its success. An explanation for which can be found in its name, Big Cola - it was sold in really big bottles for a similar price to its smaller rivals and was a cola. Two things that were bound to appeal to a cash-poor, sugar-hungry people. Within two years, it had captured 5 per cent of the market. Not a killer blow for Coke and in actuality more threatening to Pepsi but Coke's response was to hit back and hit back hard. And one of the things they did was cut off the supply of Coca-Cola to shop owners if they dared to stock their Peruvian rival, which
is what they did to Raquel Chavez and her small shop. However she took the company to court and won, and along the way exposed a vicious national campaign of intimidation and coercion.

 

The lawyers from Big Cola have agreed to chat about the case so I head out to their offices in a newly developed business district - although the rate of development in Mexico City is so fast by the time you read this, it will probably be referred to as ‘the old town'. Around the sculpted plains of these high-rise business parks there is a competition among companies to see who can put the most people into ill-fitting guards' jackets and place them around the building entrance. Here the parking lots seem full of black company cars still smelling of their new paint parked alongside enormous 4x4s, which for some reason all contain a single sports bag in the boot. But despite the conspicuous company culture the more lumpen branch of entrepreneurialism is evident all around, as along the street the irrepressible food stalls have sprung up like a crop. These makeshift wooden frames and their tarpaulin coverings are held together with bull clips big enough to trap a poacher, and under them Calor gas burners roar and frying pans the size of car tyres smoke with oil. Delivery boys and secretaries huddle around to stare into pots heating purple black beans and at grills turning corn breads brown. A police van has pulled up too, the cops get out, order
toastas
wrapped in napkins and then eat them leaning forward away from their uniform, for fear of dripping chilli sauce.

 

In one of these new company high-rises is a meeting room belonging to La Arena Trevilla Hernandez Y de la Torre, a legal firm who represented Big Cola. The room has the type of intense air-conditioning that can induce nosebleeds, and the walls hold a plasma TV and a presentation screen. To the side
of a long desk, by the best chair in the room, is a pentangular conference call phone, with a big light underneath that flashes when it rings - it looks like a plastic electric starfish bought in a pound shop but it passes for flash around here.

 

Seated on the other side of the table is a lawyer, he might represent the people who sell big cheap cola but he sips small expensive bottles of water. He has requested that I do not name him, somewhat bizarrely given that his work has hitherto not been anonymous, so let us refer to him by the pseudonym ‘Dan'.

 

Dan leans back in his chair and says, ‘In Mexican culture a person who goes to buy a soft drink will never go to a big shop, they will always to got the corner shop…small shops where the owner is a family and the whole family depends on that shop to make ends meet.' There are 700,000 such shops in Mexico and 80 per cent of all soft drinks are sold through them. ‘In mid 2002 a new soft drink called Big Cola was introduced. It started in the market offering a product, which is cheaper, and of better quality,' continues Dan, ‘the company got 3 per cent of the market share in a year.'

 

In the lucrative soft drinks market this represents a major prize and one that Coca-Cola was not willing to give up easily. Dan explains that by April 2003 ‘Big Cola started to realise that the small shops had stopped buying their products.

‘Why?'

He pauses.

‘Because Coca-Cola were using their muscle to stop the small shops selling it…' I say answering the question that wasn't intended for me to answer.

‘In mid-2003 Mrs Rachel Chavez together with other five shops denounce Coca-Cola to the Federal Competition
Commission because Coca-Cola had stopped selling Coke to her.'

‘So they stopped selling to her because she sold Big Cola?' I chip in.

He nods.

 

The FCC found that Coke had been conducting a widescale campaign against Big Cola and so ‘concludes that these are monopolistic activities which are aimed at removing Big Cola from the market. The authority imposed the biggest fine ever known in Mexico of $50,000,000 on Coca-Cola. This is the first time that a fine like this has ever given in the country…Everything was started thanks to Raquel Chavez.'

‘Did you represent Raquel Chvez?'

‘No, I was the lawyer of Big Cola. Mrs Raquel Chavez and the others did not have a lawyer. They are very poor people.'

We chat about the case and he gets some papers for me, but it is Raquel Chavez I want to see. I have been having problems trying to track her down. So I ask the lawyer if he knows has a current address for her.

‘Have you got an address for Raquel?' I ask.

‘She lives in Itzapalapa.'

‘Oh, I should go and see her, she sounds great!' I say, reigning in my over-enthusiam for meeting Raquel that is clearly not shared by the present company.

‘It is very difficult to get there and it is very dangerous,‘ says Dan, though the assessment of danger by a man thus cloaked in anonymity might not be the most accurate.

 

Dan's parting gift had been a telephone number for Raquel Chavez, so all I had to do was phone her to arrange a visit to her shop and a chat. Unfortunately the line is dead and no pleading with the operator will bring it back to life. A journalist working in Mexico City says he has another phone
number for her, different from the first. But that too does not work. So as I head towards the Metro station I call all the contacts I have once again to see if any of them have any new leads in my hunt for this elusive woman. The messages I leave on these poor people's answer machines are increasingly desperate - a mixture of begged favours, twisted arms, and promises I can't keep. But someone must have a a working phone number for her. As I descend the stairs I can only wait and hope it comes through.