A mural in Guatemala, a country where Coca-Cola has been accused of anti-union violence.
Perhaps the best-known casualty of Coca-Cola's 124-year expansion is Isidro Gil, a union leader whose face, heart, and groin absorbed a total of 10 bullets. The year was 1996. Gil had been lobbying Colombian Coke bottler Bebidas y Alimientos de Urabá for both higher wages and protection from paramilitary hit men who had already assassinated several of his associates, and who had once played soccer in the town square with an elderly man's head. The killers had also been seen sharing Cokes with the bottling plant's manager. In the span of a single day, they murdered Gil, burned the union hall, and forced the remaining members to resign or flee.
Was Bebidas behind the violence? Had Coke's Atlanta headquarters known of the threat but failed to intervene? Was Coke actually responsible for Isidro Gil's death? Michael Blanding's The Coke Machine—part nonfiction narrative, part history of the Coca-Cola Company and the many crimes it has been accused of—works hard to provide answers. Along the way, Blanding explains how a little-known medicinal drink grew into one of the world's most recognized brands, a symbol of both the gleaming mechanisms of free markets and the controversies they sometimes spark.
There can be no doubt that by the 1980s, the pursuit of profitsAmong the other "injustices" Blanding documents in his occasionally overzealous introduction: "decimating water supplies of villagers in India and Mexico, busting up unions in Turkey and Guatemala, making kids fat throughout the United States and Europe, and hoodwinking consumers into swallowing glorified tap water marketed under its bottled water brand Dasani." Their origin, Blanding argues, is Coke's single-minded pursuit of profit, and he accordingly devotes the book's first half to the evolution of the company and its brand.
and "shareholder value" had become Coke's deities.
Beginning with John Pemberton, the pharmacist who invented the drink in 1886, Blanding traces Coke's century-long commercial explosion: the company's pioneering shift from hard-sell salesmanship to the image-based advertising that persists today; its incorporation, which led to the need to please shareholders with ever-growing profits; its worldwide expansion during World War II; the growing portion sizes of the 1950s; and, in the 1980s, the invention of high-fructose corn syrup, the cheap sweetener that would boost profit margins even further. These early chapters sometimes drag, since they are not buoyed by the original reporting that makes the second half of the book so good. They also reveal a problem that tends to plague books like The Coke Machine even if they remain, as this book does, important and readable: Blanding's account is sometimes hijacked by anti-corporate fervor so strong it threatens to turn off readers, especially those who don't share his liberal politics.
Still, there can be no doubt that by the 1980s, the pursuit of profits and "shareholder value"—massive short-term returns for Wall Street—had become Coke's deities. As Coke's then-CEO, Roberto Goizueta, put it, "I wrestle over how to build shareholder value from the time I get up in the morning to the time I go to bed. I even think about it when I am shaving." With the possible exception of an activist named Ray Rogers, Goizueta is Blanding's most compelling character: a corporate titan so bold that in 1985 he (disastrously) changed Coke's sacred secret formula, although that didn't stop the company from awarding him an $80-million bonus in 1991—at the time, the largest lump payout ever given to an American CEO. His success was instead foreshadowed by another decision: He installed a computer screen displaying a live feed of the company's share price at the main entrance to Coca-Cola's headquarters, even though the Internet did not yet exist. It was the first thing employees saw in the morning and the last thing they saw as they left.
And so, as Goizueta promised annual earnings growth of 15 to 20 percent per year and the company pushed into new markets, the foundation of Coke's many controversies was laid. Blanding's book gains momentum in its second half, as the vaguely academic tone of his library-fueled early chapters gives way to firsthand accounts of real places and real people: the fruits of time spent on the road and asking questions. In the Mexican town of San Cristóbal de Las Casas, an elderly woman who sells fried snacks to schoolchildren explains how local springs dried up after a bottling plant arrived. Among the sugarcane fields and water buffaloes of the Indian village of Mehdiganj, Blanding hears a similar narrative. And in Carepa, Colombia, Blanding asks Hernán Manco, former president of the union at Bebidas y Alimientos de Urabá, whether he ever drinks Coke anymore. "No, we do not drink Coca-Cola," he replies. "Coca-Cola is death."
NEXT: How much truth is behind the allegations?
In the case of water depletion, it is hard to untangle allegations from reality. Coke likes to point out that its bottlers use tiny fractions of total regional water supplies. Other factors, like variation in rainfall from year to year and heavy watering by local farmers, make it next to impossible to distinguish correlation from causation. (Nonetheless, Blanding does find a director of an India-based nonprofit who convincingly discredits Coke's "rainwater harvesting" initiatives, which the company claims offset its water use in the country entirely.) Coke's arguments about the killings in Colombia, however, are not quite as persuasive.
Poster created by The Campaign to Stop Killer Coke.
Undeterred, Blanding doesn't let Coke off the hook. By the end of The Coke Machine, the company still looks tainted, mostly by its fierce attempts to keep whatever facts exist, incriminating or not, from surfacing. After Rogers was tackled at the shareholder meeting, his movement, fueled largely by college students, continued to swell: Many schools, including New York University and the University of Michigan, would eventually threaten to terminate (and in some cases, actually terminate) their contracts with the company. In 2004, Coke general counsel Deval Patrick pledged to commission an independent investigation of what happened in Colombia—but the idea was shot down, and Patrick, now better known as the governor of Massachusetts, resigned.
Instead, Coke began a public relations blitz and entered talks with the union, a move that stemmed the activism even as Coke made demands including that Web sites and search engines be scrubbed of all references to the campaign. The delays, coupled with an eventual study of the company's conduct in Colombia by the United Nations International Labor Organization, which Coke promised would "evaluate past and present labor relations," were enough to kill Killer Coke—even though the U.N. actually examined only "current working conditions" and not the lead-up to the assassinations.
Today, Coca-Cola's official position is that it is innocent, a claim that is supported by inquiries completed by the Colombian Office of the Attorney General and the outcome of the U.S. legal case. A district court in Miami exonerated both the Coca-Cola Company and its Colombian bottlers, and on August 11, 2009, an appeals court upheld the decisions, calling the union's allegations "too vague and conclusory." Even so, Blanding argues that Coca-Cola's steamrolling of the Ray Rogers campaign and its endorsement of a questionable U.N. investigation exemplify a strategy it has pursued throughout its history: "to remove the threat to its brand without agreeing to any enforceable requirements that might hold it accountable down the line."
Whether Coke has dodged enforceable requirements is up for debate. But in removing threats to its brand it has of course been nearly flawless, which is why we can remain surprised when Blanding's painstakingly reported book reminds us that Coke's global success—perhaps like all spectacular global success—came at a price.
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