Belching Out the Devil (41 page)

 

There have been some significant successes in the struggles against the Company and there are campaigns and solidarity groups that anyone can take part in. Yet despite this there is an aching question of ‘what can I do, they are one of the world's biggest companies?' But the one thing the Company has taught me is that stories matter. How much do they matter? The Coca-Cola Company does not want people seeing a bottle of Coke and not hearing the story they have spent US $2.4 billion telling. The last thing the Company wants is consumers thinking about their product rather than associating it with memories or feelings, things that do not sit well with awkward questions. The stories I have heard on these trips challenge the corporate narrative. The bundles of stories on scribbled notes and Edirol recordings matter, and they matter to the Company as much as to the people who told them. Each time they get told it is another chip away at the brand value. Sure, the Company will continue making
profit, but they won't make as much as they could do…and believe me that really hurts them.

 

As epiphanies go this one lacks the dramatic gesture of being struck blind on the way to Damascus but it does mean I can make it out of the hall without stumbling for help.

 

It is time for me to go. I take leave of B Wardlaw, wave goodbye to Amit and search out Lew to try and get a lift back to Brooklyn. As I get to the top of the steps one of the Company staff stops me.

‘Sir.'

‘Pardon?'

‘Have you got your shareholder's card?'

‘Er…no…'

She tuts. ‘Doesn't matter, you have one anyway. You should hand over your shareholder's card to receive one but it doesn't matter. There you go.'

Conspiratorially she hands me a thin cardboard box. ‘Here you go, sir,' she says winking.

‘Thank you.'

 

Heading to the hotel entrance I open the box. Inside is a slim silver metal commemorative Coca-Cola Company pen, a gift to the shareholders. ‘Wow,' I think, ‘they even give me the ink with which to write.'

 

 

J
erry Farrell is travelling to a football match with his brother and their children when his mobile rings. Jerry is in his early fifties and works as a line manager at Drogheda Concentrates where he oversees about eighteen workers. The plant, north of Dublin, is where The Coca-Cola Company makes the syrup and concentrates for their drinks. Jerry is a union official there for SIPTU (Services, Industrial, Professional and Technical Union). He is also the Co-Chair of the Coca-Cola Communications Forum. It is a grand title but essentially this is where managers and workers
discuss how the company's long-term plans will affect employees. But today the business of work is relegated to its proper place and the matter in hand is football. Tomorrow Drogheda United will play against Helsingborg in the UEFA Cup in Sweden and the most important thing is to get to the hotel.

 

The mobile rings again, showing a number he isn't expecting. Not today leastways, today is holiday time. The voice on the end of the line is Coke's General Manager in Ireland.

‘Jerry, sorry to disturb you, I know you are away at a football match, but I have to tell you there is an announcement being to be made in under an hour.'

‘About what?'

‘We are going to shut the plant in Drogheda.'

 

It is 29 August 2007, the day before Drogheda lost to Helsingborg 3-0. There are about 200 fans travelling to see the match, out of which fifty work at the plant. Jerry hangs up and goes to give them the news.

 

The plant employs 256 workers, probably 350 when you include the contract staff, the canteen, security and cleaners. As Jerry is the Co-Chair of the Coca-Cola Communications Forum the company informs him of the closure an hour before it is announced publicly; the call, says the General Manager, is out of respect.

 

Eleven months after that phone call and the plant is all but closed. ‘Respect…' Jerry shakes, his head as he tells the story, ‘an hour before they make the announcement and they call it respect.' Most workers left for the last time on 27 June 2008, leaving the plant to be run down for good by the end of August. By the time you read this it will be shut.

I had phoned SIPTU a few weeks ago and they had put me in touch with Jerry, so this is the first time I have meet him. Jerry is fifty-two, dresses well but not too flash, has a wife, two kids: he's a typical working-class guy. But the thing that defines him today is his anger and resignation, he exudes a kind of fuming fatalism. In his car he talks non-stop during the forty-five-minute drive from Dublin to Drogheda along the motorway, then on through the quieter lanes, following the lush riverbanks. ‘This is where they fought the Battle of the Boyne' he says, pointing at a gateway, ‘the tourist folk have done it really nicely.'

 

As we head through Drogheda he explains that they call it a ‘Bed and Breakfast town, so many people work in Dublin and commute.' But driving through the industrial area is a different story. We seem to pass rows of disused warehouses and industrial units. Jerry nods at each and starts every sentence with the words, ‘This was the place where the so and so factory used to be…' or ‘This is the site of the old so and so place…' Row upon row of empty factories and businesses, the stillborn pups of the Celtic Tiger.

 

Sitting in a near-empty hotel bar just by the river we drink tea and natter for two hours while waiters in standard black shirts and white aprons glide around the room to the sound of discreet hotel tunes, ‘lobby house music' or a compilation that is probably on sale at reception.

 

Jerry explains the significance of the plant, ‘Seven out of every ten of Coca-Cola's drinks drank around the world on any given day start in Ireland, the concentrate is made in Ireland.' Given that 1.5 billion servings of Coke's products are consumed every day - that's a lot of concentrate.
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This is the hub of Coke's operations.

Different drinks require different types of ‘beverage base' some are liquid concentrates, some are powder, the various mixes leave the plant in various forms and head off as far afield as Australia. ‘The flavourings come over from Sidcup in the UK,' says Jerry explaining that The Coca-Cola Company's secret ingredient called ‘7X' is manufactured there. ‘But the main ingredient that goes into Coke for concentrate is caramel. Then you have things like phosphoric acid and obviously the 7X and then you have all these little flavours. So in a batch of Coke there are probably ten ingredients.' As there is little automation in the plant Jerry says the process of making the concentrate is quite skilled. ‘It tends to be people weighing out ingredients into tanks, it is very, very manual. So it is very hands on, so that is why they rely so much on experienced operators knowing what they are doing cos if you make a mistake in any of this and it is not picked up by the labs and it goes out to the fields…' He shakes his head.

 

I am curious about the concentrate business. ‘How much did the plant make?' I ask.

‘Drogheda would make about 8 million units of concentrate a year,' Jerry replies.

‘And how big is a unit?'

‘For Coca-Cola a unit is a US gallon.'

‘How many drinks would you get out of a unit?'

‘Depends what it is, it varies from drink to drink.'

‘Coca-Cola…'

‘I think it is about two units make 100,000 or somewhere around there.'

‘How much does a unit cost to make?'

‘Drogheda made it for about $3.67.'

‘So roughly $3.67 is enough for about 50,000 drinks…'

‘The $3.67 is for the ingredients and labour costs to make it.'

I believe my next word is ‘Fuck…'

According to Jerry the cost of concentrate was even lower in Ballina, ‘US $2.60 a unit,' he says. The differences in production costs was used by the company, ‘so if Drogheda didn't get down to Ballina's level the company shift work from Drogheda to Ballina. What they have is an internal competition going on. The company create a very competitive internal environment.'

 

The company might say they had overcapacity in Drogheda but the lure of cheaper concentrate could have played a part in the decision to shut down the plant here.

 

Drogheda Concentrates is owned by Atlantic Industries, which is registered in the Cayman Islands and is a direct subsidiary of The Coca-Cola Company. There is a distinct whiff of ‘tax efficiencies' in the air. And by a ‘distinct whiff' I mean ‘stink'. For most of its history, Ireland has been a predominantly agricultural economy but in the Seventies it made some radical changes to its tax system to encourage investment. Corporation Tax for some industries was slashed to 10 per cent and it now stands at 12.5 per cent, offering one ‘of the most beneficial corporate tax environments in the world'.
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It is not surprising therefore that Ireland was by 2004, the world's most profitable country for US corporations.
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(Though for lovers of irony and gossip the anti-poverty campaigner and musician Bono moved his music publishing company to the Netherlands after Ireland scrapped a tax break on royalties.
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)

 

According to Jerry, ‘Coca-Cola came here purely for the taxes. Nothing else.' And logically he has a point, why else would a company establish its operations in Ireland and send ‘seven out of ten' of its concentrates around the world from there?

 

Coke Throat in Mexico had explained that the concentrate for Coca-Cola made in Mexico came from Ireland, ‘Well, we have
a huge manufacturing facility here in Mexico that used to supply all the concentrate, we have the capability, the problem was that producing it here, and paying taxes here was less attractive than the full incentive of bringing it from Ireland and shipping it on a ship, on a freight to Mexico…it's just accounting.' For the Company it is a way of ensuring large profits remain in low tax regimes. As Coke Throat said, ‘that way you reduce jobs in the country your bottling plants operate and you reduce tax paying, and this transfers all the benefits to Coca-Cola.'

 

Indeed, The Coca-Cola Company's annual report for 2006 says, ‘Our effective tax rate reflects tax benefits derived from significant operations outside the United States, which are generally taxed at rates lower than the US statutory rate of 35 per cent. Our effective tax rate of approximately 22.8 per cent for the year ended 31 December 2006.' That year the company profits were US $6,578 million. By putting their business in tax havens the Company's declared tax paid that year was US $1,498 million. Had they paid tax in the US at 35 per cent the Company would have contributed approximately another US $804 million. So Coke Throat is right in the sense that is does indeed ‘benefit Coca-Cola'.

Back in Ireland there were three plants that made concentrates, Drogheda in the east, Ballina in the west and a small plant in Athy to the south of Dublin. According to the company, Athy and Ballina ‘are sufficient to meet the current and future demand for concentrate and beverage base supply from Ireland'.
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So Drogheda was shut because of overcapacity and Drogheda's work was moved to Ballina. But according to Jerry there is another agenda going
on here, Drogheda is totally unionised and Ballina is totally non-union.

 

The reason for Ballina being non-union is historic. ‘In the Seventies they had a Japanese plant there and the union there had a strike,' Jerry tells me. ‘Now the company said “If you don't report for work on Monday we will shut the plant down.” And everyone said “Oh yeah, that's what they always say.” But come Monday the plant shut and the company left...'

‘And because of that the community is anti-union…'

‘They blame the union for losing the jobs.'

‘So is SIPTU going to try and form a branch in Ballina?'

‘It is very difficult to get into Ballina…I have spoken to managers and supervisors, the normal people you would expect to talk to about it. They tell you the same thing. “Not interested, Jerry, not interested, Jerry…”'

 

When I talked to Ron Oswald from the International Union of Foodworkers, a man who deals with Coca-Cola a lot, he was quite blunt about Coke's operations in Ireland. ‘We think there are sophisticated human resource practices inside these operations which essentially is designed to squeeze the space out from where unions can operate.'