The Coke Machine (23 page)

For the time being
, however, the company was able to breathe a sigh of relief when it put the Guatemala incident behind it, and could focus again on expanding the company. When Roberto Goizueta took over the Coca-Cola Company in August 1980, he targeted international growth as a critical part of his plan to increase shareholder value and make Coke, as he would later say, “the number one beverage on Earth.” The yardstick he chose to measure that growth was “per-caps”—the number of drinks per capita claimed by Coca-Cola in a country in a given year. He salivated as he looked at the numbers. Per-caps in Latin America at the time were just a third of those in the United States; those in Europe, less than a quarter; and in Africa, only 4 percent.

Goizueta’s mantra was “Think globally, act locally,” a phrase first attributed to him and only later appropriated by social activists. Under his leadership, Coke concerned itself with the minutiae of foreign markets, installing automatic drink dispensers on street corners in Tokyo and slapping thousands of Coke stickers on every available surface in Bordeaux. “Our success,” Goizueta wrote, “will largely depend on the degree to which we can make it impossible for the consumer around the globe to escape Coca-Cola.”

Again, politics took a backseat. When activists threatened a boycott of Coke if it didn’t divest from South Africa’s repressive apartheid regime, Coke brushed them off. It could ill afford to lose the country, which accounted for 70 percent of sales on the continent. When the Atlanta-based Southern Christian Leadership Conference (SCLC)—the civil rights group established by Martin Luther King, Jr.—joined the call, however, Coke compromised by moving its concentrate plant supplying the bottlers to black-ruled Swaziland, and establishing a $10 million fund to support African-Americans administered by Nobel Prize winner Archbishop Desmond Tutu.

That mollified the SCLC, even as Coke—and the apartheid government—continued to profit from its South African bottling franchises. For years after his release from prison, Nelson Mandela denied Coke’s offers of travel aid, and even required hotels to remove Coke products from his sight during his stay. The company assiduously courted the sainted leader, putting its highest-ranking African-American executive on the case. By 1993, Coke was contributing heavily to Mandela’s campaign to be elected president of a new South Africa, and he was flying around on one of Coke’s corporate jets. A year later, Coke returned to South Africa, picking up where it had left off by assuming ownership of the company it had contracted with after it departed.

By 1988, more than three-quarters of Coke’s profits came from outside the United States. That year, it topped $1 billion in profits for the first time in history. While it had taken a hundred years for it to reach that mark, it doubled its profits to $2 billion just five years later, in 1993, when it became the sixth most valuable company in the United States. When new CEO Doug Ivester took over in 1997, he wasted no time exploring ways to scrape more profits from foreign countries—including an attempt to pilot a new vending machine in Brazil that would vary its price based on the temperature. “This is a classic situation of supply and demand,” Ivester told a Brazilian newspaper reporter. In hot weather, “the utility of an ice-cold Coca-cola is very high. So it is fair that it should be more expensive.” The comments resulted in an uproar, not only in Brazil but also in the United States, where they were reprinted and lambasted on late-night talk shows.

Lost in the same interview, however, was a statement at least as outrageous, and with much more lasting implications. Asked about health concerns regarding Coke, Ivester brushed them off. Sugar, he said, was “a good source of energy, of vitality. . . . We have a very healthy product.” If Coke’s contributions to obesity and disease were apparent in the United States, however, they’d become even more of an issue in the developing world, where a balanced diet is hard to come by even on a good day. Nowhere are those negative effects starker than in Mexico, and nowhere in Mexico is it starker than in Chiapas. It’s here, just a few miles from Chamula, that the latest call for a boycott against the company has emerged.

 

 

 

Even though
Mexico was one of the first countries to see Coke served outside its homeland, it wasn’t regularly drunk here until the 1950s, when Coke began the ad blitz to wallpaper the country in red and white. Before then, even the poorest farmers ate a relatively healthy diet of corn and beans. A study two decades later found white bread and Coca-Cola were the two food items
campesinos
bought as soon as they could afford them—and sometimes even when they couldn’t. “It is not uncommon, doctors who work in rural villages report, for a family to sell the few eggs and chickens it raises to buy Coke for the father while the children waste away for lack of protein,” wrote Richard J. Barnet and Ronald E. Muller in 1974 in
Global Reach
, one of the first books to look critically at the growing power of multinational corporations.

Along with the proliferation of advertising, Coke followed the same early sales plan that it had in America, with enticements such as branded chairs, tables, and refrigerators for shopkeepers who sold above a certain quota. It also used more aggressive tactics, threatening shopkeepers if they sold any competing brands. In Mexico City in 2002, for example, Coke distributors told a forty-something shopkeeper named Raquel Chávez they’d stop delivering Coke to her store unless she got rid of a Peruvian import called Big Cola. Chávez reported them to the Federal Competition Commission, which fined the Coca-Cola Export Corporation $68 million for unfair competition. (“You may call the shots everywhere else, but I’m the boss in my store,” she told the BBC.)

Coke’s sales tactics have paid off in Mexico, however, raking in profits for its Mexican anchor bottler, Coca-Cola FEMSA, and its parent company, FEMSA. The latter company is a member of the Forbes International 500 list, with a value of nearly $6 billion. The company’s profits tripled in the past decade following the acquisition of several smaller bottlers, including Venezuela-based Panamerican Beverages (Panamco). Between 2002 and 2007, FEMSA’s stock price tripled, from $35 to more than $115 a share. Much of that wealth found its way to Atlanta—since in addition to making money on syrup sales, the Coca-Cola Company owns more than a 30 percent stake in Coca-Cola FEMSA.

The increase in Coke sales was felt directly in Chiapas, where the first crates of Coca-Cola were brought up to Chamula by horse in the early 1960s. At first, the growth of Coke in the region coincided with a welcome decrease in the consumption of homemade alcoholic beverages. Years ago, says City University of New York anthropologist June Nash, the men and boys of the highland villages drank copious amounts of
pox
—the homemade sugarcane rum seen in the Chamula church. In part, the drinking was pushed by the village elders, called
caciques
—local political bosses who tightly controlled
pox
production and profited from its sale.

When Nash lived in the nearby village of Amatenango in the 1960s, boys and men drank
pox
daily in both religious and civil ceremonies, holding competitions to see who could drink the most. Not surprisingly, the practice led to rampant alcoholism with serious health and social problems. “There are problems with Coca-Cola, but nothing compared with the alcoholism, which was debilitating in every way,” says Nash. Some peasants even converted to Protestantism to exempt themselves from having to drink so much. Fearing they were losing control, the
caciques
turned to a new drink that was just then beginning to penetrate the market: Coca-Cola.

In many communities, the same
caciques
who monopolized production of
pox
retained the concessions to Coke and later Pepsi. In some, such as Amatenango, concessions were granted politically, with officials of the Institutional Revolutionary Party (PRI) controlling Coke and the Party of the Democratic Revolution (PRD) controlling Pepsi. It was easy enough to substitute the new drinks for many of the same rituals that previously used
pox
(though in some cases, such as the church in Chamula,
pox
is still maintained in limited quantities). Those owning the concessions of the soft drinks became rich, reaping huge profits in villages with little other commerce or industry, and passing the concessions along to family members to create dynasties. Before long, however, the increasing consumption of soft drinks brought its own problems—tooth decay, diabetes, and obesity. “Ugh, they drink a lot of soft drinks, they really push it,” says Nash. “They never used to have decayed teeth before, and you can really see it now.”

In an interview with American anthropologist Laura Jordan, the current owner of the concession to distribute Coca-Cola in Chamula and the surrounding area, Carlos López Gómez, enthused about the popularity of soft drinks for the local people. “[It is] part of daily life,” he said. “Like drinking water—every day. Instead of water, they learn to want soda. They want Coca-Cola.”
⁵
A Chamula city councillor for the minority party, the PRD, elaborates further. “Indigenous people, the number-one thing they consume is Coca-Cola, and the number two thing is Pepsi,” says Cristóbal López Pérez. So nervous was he about speaking about the beverage, he insisted on arranging the interview in the back room of a local human rights organization. Sitting at a cramped table wearing a cowboy hat and zip-up cardigan over a collared shirt, he paints a picture of cradle-to-grave consumption of which U.S. marketers could only dream.

“When a child is born, they give soda. When a woman is married, they give soda. When someone dies, they give soda,” he says. The amount is directly related to the wealth of the family, ranging from three or four boxes up to one hundred depending on the occasion. No event, however, matches election time, when all candidates buy astounding amounts of Coke for their supporters. For López’s council election, he bought five trailers, each with 180 boxes, totaling more than 20,000 bottles for just one candidate. On election day, he says, people bring straps to the polling booth to cart home the expected case of soda. “Whoever gives Coca-Cola has more of a possibility of winning,” he says. “If you give another kind of soda, it’s not as good.”

No one is obligated to buy soda, says López, but
not
buying it is the easiest way to acquire social stigma in the village. Families who serve the locally made corn beverage
pozol
at parties are looked down upon. “People say, ‘They shouldn’t have invited me. I can make that at home.’” López is one of the few people in the village who is critical of all of the soda consumption, which he blames for the poor health of the community. “There are many headaches, people have gastritis, they have sugar in the blood [diabetes],” he says. “We are just beginning to realize that this is not nourishing for our bodies, that it is making us sick.” Asked if he’s tried to broach the subject with his neighbors, he sighs. “It is not possible to change people today or tomorrow. I don’t know when this is going to end. To change the mentality of people is very difficult.”

 

 

 

Health problems
in the villages of Chiapas have been exacerbated by recent changes in patterns of physical activities by the peasant population. As mining and oil interests have taken up arable land, men from the villages have increasingly gone to the United States to find work, leaving behind women and children to live a more sedentary lifestyle—using their money transfers from America to buy more junk food. Local indigenous health coalition COMPITCH has done surveys of communities in the highlands and jungles of Chiapas, finding that problems with obesity and diabetes are greater in communities closer to the roadways plied by delivery trucks for Coca-Cola and other processed foods. “We can’t blame Coca-Cola,” says the group’s Juan Ignacio Dominguez, “but we can situate Coca-Cola as a detonating component. When we put together all these social factors, Coca-Cola is the last drip that makes the cup overflow.” He shakes his head. “There is something that makes Coca-Cola really formidable for us. Maybe it has to do with the sugar,” he says, laughing. “We are a very sweet culture.”

In fact, he may not be far off. Research by the Chiapas-based medical NGO Defensoría del Derecho a la Salud (Health Rights Defense) has found the taste for sugar is established at a very early age, with most women in indigenous villages serving their children soft drinks even below the age of three. “These three years in many ways define the future of the child, and it is when malnutrition and diabetes can be prevented,” says the group’s director, Dr. Marcos Arana. “If babies are exposed to a high intake of sugar, they will be conditioned to depend on sugar for the rest of their lives.” While breast-feeding is still the norm for younger children, says Arana, there are still instances of mothers putting Coca-Cola into baby bottles.

Anecdotally, Arana says he has seen a steady increase in obesity and diabetes in the communities he serves. Official evidence, however, is hard to come by. While government statistics show Chiapas has the highest rates of obesity in the country, for example, it has one of the lowest rates of diabetes, which Arana says is due to an underdiagnosis of the disease. Compounding the problem is the lack of safe drinking water at homes and schools in highland communities. “The teachers know this and sometimes they are convinced by Coca-Cola to promote the consumption of soda in schools among the children,” says Arana. As in the United States, many schools still have exclusivity contracts with Coke or Pepsi—and despite phasing out sugary beverages in schools in the United States, they are still frequently sold here. “They do in other countries what they would not do in the United States,” sighs Arana, a statement that represents a lot about Coke’s strategy around the world. Because the company’s franchise bottlers aren’t directly owned by the company, they don’t have to live up to the same standards.