Coca-Cola's Business Practices: Facing the Heat in a Few Countries
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Case Code : BECG061
Case Length : 20 Pages
Period : 1989-2006
Pub. Date : 2006
Teaching Note : Available
Organization : The Coca-Cola company
Industry : Beverage (Softdrink)
Countries : USA, Columbia, India, Mexico
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Trade Practices in Mexico
Mexico was a very important market for Coca-Cola as the country was second, after the US, in terms of per capita consumption of soft drinks in the world. The Mexican market for soft drinks was estimated at US$ 6.6 billion for the year 2004. Over the years, some of the highest profit margins for Coca-Cola in its overseas operations came from Mexico. Coca-Cola was the number one seller of soft drinks in Mexico with a 70% market share. Coca-Cola's largest bottler in Mexico was Coca-Cola Femsa (CCF) in which Coca-Cola had a 40% stake...
Environment & Product Issues in India
In India, Coca-Cola was accused of draining the underground water table, of releasing improperly treated industrial effluents, and of selling products containing pesticide residues above standard limits. The focal point of the environmental accusations in India was the Coca-Cola plant located in Kerala. Coca-Cola, through its subsidiary in India, The Hindustan Coca-Cola Beverages Pvt. Ltd., had established a bottling plant at Plachimada locality in Palakkad district in Kerala.
The unit was established in 1998-99 in a 40-acre plot that had previously been used for irrigation of paddy and other food crops. The factory site was located in the proximity of a main irrigation canal that drew water from a nearby barrage and reservoir...
Boycott of Coca-Cola Products
In July 2001, SINALTRAINAL, with the help of United Steelworkers of America (USWA) and the International Labor Rights Fund (ILRF), filed a lawsuit against Coca-Cola and its Colombian bottlers at a court in Miami, Florida, under the Alien Tort Claims Act (ATCA) of the American Judicial System. It accused them of being responsible for a campaign of murder and intimidation against its unionized workers and charged that it was using right wing paramilitary groups for the purpose. The US judge dismissed these charges against Coca-Cola in Colombia but approved the charges against the local bottlers in Colombia...
Coca-Cola opened an exclusive website, www.cokefacts.org, to address these allegations, especially those related to Colombia and India. In an official statement featured on the website, Coca-Cola claimed that the allegations against the business practices in Colombia were false.
Two different judicial enquiries in Colombia, one by a Colombian court and the other by the Colombia Attorney General, had found no evidence against Coca-Cola or its bottlers linking them to the murders of the union members.
Coca-Cola also quoted a judgment in the lawsuit at Miami, Florida, wherein the judge had dismissed the charges against Coca-Cola, Columbia...
Exhibit I: Hobble-Skirt Design Bottle
Exhibit II: Bell Shaped Fountain Glass
Exhibit III: Popular Advertising Slogans of Coca-Cola
Exhibit IV: Comparison of Key Financials for the Years 2003, 2004 & 2005
Exhibit V: The CocaCola Quality System (TCCQS)
Exhibit VI: Coca-Cola's Code of Business Conduct
Exhibit VII: Other Allegations against Coca-Cola
Exhibit VIII: List of Organizations that Boycotted Coca-Cola
Exhibit IX: Interbrand Top Ten Brand Rankings from 2001 to 2005
Exhibit X: Awards Won by Coca-Cola in India