The Coke Machine (24 page)

In addition to contracts in schools, Coke also drives up soda sales by selling beverages for a cheaper price in indigenous communities. In the city of San Cristóbal de Las Casas, for instance, a liter of Coke sells for 10 pesos (about 90 cents), while just up the mountain in Chamula it is sold for half that. In the same shops, a 1.5-liter bottle of Coke’s water brand Ciel costs 10 pesos, making Coke actually cheaper than its main ingredient. The most logical explanation for the difference is that the company is hoping that the taste for sugar will result in more sales over time.

Arana is part of a group of doctors who pushed for a soda tax to curb consumption nationwide. In 2002, in fact, the country imposed a 20 cent tax on all soft drinks made with high-fructose corn syrup, affecting Coke and Pepsi but not local sodas made with sugar from sugarcane. (The rumor persists that Coke in Mexico is made completely with natural cane sugar, which the Coca-Cola Company does nothing to dispel. However, that hasn’t been the case for a decade, since the North American Free Trade Agreement flooded the market with cheap corn, and Mexican bottlers began using cheaper HFCS. In past years, Coca-Cola FEMSA has used up to 60 percent HFCS in Mexican Coke. By 2009, that ratio was down to 30 percent, but with plans to raise it because of an increase in sugar prices.)

When the tax was passed, however, the United States promptly filed a dispute on Coke’s behalf in the World Trade Organization (WTO), arguing it was discriminatory against American products. The WTO ruled in the favor of the United States in 2005 and again in 2007, after which Mexico repealed the tax. An effort by Mexican president Felipe Calderón to impose a 5 cent tax on all soft drinks failed in the legislature, amid heavy lobbying from soft drink companies. Arana is hopeful that in the future another tax might succeed—or if not, then at least the government might be able to pass a law outlawing the selling of soft drinks at different prices, or prohibiting exclusive school beverage contracts.

The health issues surrounding soft drinks, however, are not the only issues here that have led to a backlash against the company. Down the mountain from Chamula and the highland villages, residents of the city of San Cristóbal have raised questions about how the company produces the drinks themselves.

Geckos scampe
r underfoot during the steep climb up Huitepec, a dormant volcano on the outskirts of San Cristóbal de Las Casas. The path weaves its way through a forest of ancient-seeming oak trees, all twisted trunks and gnarly burrs with moss and vines clinging to their sides. It’s easy to see why the mountain holds a special place in the folklore of the indigenous Maya, many of whom still believe the spirit of the place watches over them. Unlike the dry, piney hills around, Huitepec is lush and green, supporting not only white oaks but also a fragmentary cloud forest with an array of wildlife, including more than one hundred species of birds, squirrels, deer, and coyote.

The largest mountain in the hills encircling San Cris (as the municipality is known), Huitepec collects water from the rains that blow through the valley, then percolates the water through the volcanic soil and limestone into a huge underground aquifer that serves as the major municipal water source. The apparent abundance, however, is an illusion—hiding a chronic shortage of water that plagues the surrounding communities. “During the dry season there is huge water scarcity here,” says Erin Araujo, an American graduate student who has studied the water table, pausing for breath in a clearing near the top of the mountain. “Most people get their water only from the municipal water supply, and during the dry season all of the rain that replenishes the aquifer has dried up.” At those times, residents of San Cristóbal are rationed—some limited to only a few hours of water a day in outlying communities, even as residents in the city center are allowed twenty-four-hour, seven-day access.

Even more egregious to some residents is the presence of a Coca-Cola bottling plant on the other side of the mountain, which always seems to have enough water for its beverages. Coke’s presence at the foot of Huitepec dates back to the late 1980s, when it first established a bodega here. Soon Coca-Cola FEMSA moved its bottling operations to San Cristóbal from the state capital, Tuxtla Gutiérrez, to take advantage of the more abundant water supply there. By 1994, the plant was churning out five thousand cases a day, ramping up production year after year. By 2004, it had doubled that to ten thousand cases a day, serving not only the entire state of Chiapas, but also part of the neighboring state of Tabasco. By 2008, it was serving part of Oaxaca as well.

According to government statistics, the company has the right to extract up to 500 million liters a year from the aquifer—an amount translating to 1.37 million liters a day. Coca-Cola FEMSA denied a request for an interview, asking that questions be transmitted through the Coca-Cola Company, which in turn directed them back to Coca-Cola FEMSA. A company spokesperson, however, defended the company’s water usage to Laura Jordan, an American anthropologist who wrote her thesis on Coke and corporate social responsibility in the Highlands in 2008. The plant’s human resources director, Graciela Flores, told Jordan the company takes no more than 2 percent of the total water consumed by “all of San Cristóbal”—at the same time providing a number of well-paying jobs to the community.

Those who live in the vicinity of the plant, however, see things differently. On the other side of the mountain, the Coke plant squats in a massive gray installation beneath Huitepec’s bulk. On the rutted dirt road behind it, an elderly woman named María de la Asunción Gómez Carpio sells fried snacks to school kids. “The water here used to be very abundant, but all of the springs here dried up since the plant came here twenty years ago,” she says. Now she says residents in her neighborhood, which sits on one of the richest aquifers in Mexico, get water brought in by tanker trucks called
pipas
—pipes—at the cost of $240 pesos ($22) a month.

Asked about employment the company provides to locals, she laughs. “No, they don’t give employment to people with low education; you have to be educated to work there.” Meanwhile, she says, the company has refused requests for assistance in repairing the road behind the plant. “They provide no benefit. On the contrary, they take from us.” The story is repeated by several other residents in the vicinity of the plant, including Rosa María Reazola Estevané, who lives in a nice house at the top of the hill. “There used to be a lot of water,” she says. “Now there is a scarcity. They are not paying anything, and they are just taking our water away. I am really pissed off about it. I want them to leave.”

From the looks of things, the company isn’t just taking—it’s also leaving a foul-smelling stream that flows from one side of the plant. In the central Mexican state of Tlaxcala, the outspoken mayor of the town of Apizaco, Reyes Rúiz, accused Coke of polluting the land with a milky effluent that killed trees in a river a short way from the plant. In addition, as in San Cristóbal, he has accused Coke of decreasing the local aquifer and drying up farmland. FEMSA has denied the charges, pointing out that it stays within the 450 million gallons allowed by the National Water Commission, and that the plant accounts for less than 1 percent of the total water usage in the region. “We comply with the law,” Marco Antonio Dehesa, project engineer with Coca-Cola FEMSA, repeatedly told researchers with the American nonprofit Grassroots International.

For all of the water that it takes from communities such as Apizaco and San Cristóbal, however, Coca-Cola FEMSA pays them nothing for the privilege. That’s because the company has negotiated contracts for the water extraction directly with the federal government in Mexico City, thanks to a law passed with the help of a former Coke executive who happened to be Mexico’s president. Whatever influence Coke has had with U.S. presidents from Eisenhower to Carter, Coke FEMSA surpassed it in the unprecedented access to the halls of power it had through former Mexican president Vicente Fox. Back in the 1970s, Fox was director general of Coca-Cola Mexico, a division of the Coca-Cola Export Corporation that is fully owned by the Coca-Cola Company; during his tenure, he boosted Coke’s sales to topple Pepsi as the nation’s best-selling soft drink.

“Working at Coca-Cola was my second university education,” Fox told
The New York Times
in 1999. “I learned strategy, marketing, financial management, optimization of resources. I learned not to accept anything but winning.” Nicknamed “The Coca-Cola Kid” during his campaign, Fox used focus groups and heavy television advertising he learned from his Coke days to win. He also drew heavily upon his former Coke connections, including hiring a former Coke executive as his finance director who raised millions from Coke bottlers and other businesses to put him on top. After he became president in 2000, Fox had no compunction about helping out his former employer. He appointed another former Coke director general, Cristóbal Jaime Jáquez, national water commissioner; together, they pushed privatization of much of the country’s water network and sold extraction rights directly to big agribusiness and other corporations.

Coca-Cola FEMSA, the anchor bottler in Mexico and the owner of the Chiapas plant, was one of the big winners of the new policy, according to an investigative news report in 2003. In all, FEMSA negotiated twenty-seven concessions to extract water from aquifers and rivers, along with another eight concessions to dump waste in public waters. For all of these, it paid a reported $29,000 in U.S. dollars—a pittance compared with its $650 million in annual profits. According to San Cristóbal’s former right-wing mayor, Victoria Olvera, the company has continued to pay next to nothing for the community’s water, with an outlay of only 1.75 million pesos ($150,000) annually—or as little as three-hundredths of a cent per liter—to the federal government. “Nothing for the municipality. Nothing,” Olvera told anthropologist Jordan. “They say, ‘We generate employment. ’ But there is not as much employment as the damage they cause us, and they could be doing us so much good if they
could
pay that tax.”

Even more than its effect on health of the local community, resentment over water use has turned many in the environs of San Cristóbal against the company, making it a symbol of greed in an environment already hostile to American capitalism. Like France in the 1950s, Chiapas has become deeply distrustful of the motives of American corporations. After all, it’s the home of the most famous revolution in the last twenty years.

 

 

 

They came
out of the jungle on New Year’s Day, 1994, wearing black ski masks and carrying assault rifles as they took control of the main square of San Cristóbal de Las Casas. For years, San Cris has been a laid-back tourist town, blending Maya and gringo culture in the cafés and street festivals. Now the tourists locked in their hotels had no idea what to make of the hooded revolutionaries in their midst. Finally, their leader identified himself as Subcomandante Marcos. His comrades, he said, were Zapatistas, after the revolutionary peasant leader Emiliano Zapata, and here to demand land and rights for the indigenous people. It was no accident that the revolutionaries appeared on the day the North American Free Trade Agreement was implemented in the United States and Mexico, since Zapatistas saw the free-trade deal as a continuation of the policies that had allowed privatization and sale of their land to ranching, mining, and natural gas interests.

While the Zapatistas stemmed from the Marxist revolutionaries once common in Latin America, they didn’t espouse the traditional communist ideology with a top-down command structure. Instead, they supported autonomous village groups that could stand outside Mexico’s notoriously corrupt political structure. After clashes with the army in which several hundred people—mostly Zapatistas—were killed, the group renounced violence. Soon the tourists came back, and in greater numbers, as the Zapatistas became a cause célèbre among lefty activists. Peace was short-lived, however, as the army raided several Zapatista bases, and paramilitary groups staged massacres in several villages known to sympathize with the rebels.

When Coca-Cola Kid Vicente Fox won the presidential election in 2000, he tried to negotiate with the Zapatistas, compromising on a new law to protect indigenous rights and demilitarize Chiapas. After the law had been weakened, however, Marcos rejected it as a joke and the Zapatistas went back to the jungles, where they’ve remained ever since. Strangely enough, while the Zapatistas have fought exploitation by other foreign multinationals—most recently drug companies they accuse of driving them off their land in search of new medicinal plants—they’ve had no problem with Coke. Even as Marcos has barred drugs and alcohol from rebel-controlled areas, he has encouraged consumption of Coca-Cola, whose trucks have reportedly been the only traffic allowed through the front lines during skirmishes with the army. “We have a way to get rid of Coke,” he once joked. “We will drink every last bottle.”