Coca-Cola's Business Practices: Facing the Heat in a Few Countries

            
 
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Case Details:

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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Introduction Contd...

In 2003, a BBC5 report revealed that Coca-Cola was distributing improperly treated sludge containing toxic carcinogens and heavy metals like cadmium and lead, as fertilizer to farmers in the region. Coca-Cola shut down this plant in March 2004 owing to mounting pressure. The company then decided to shift its operations to a nearby industrial zone, the Kanjikode Industrial Area.

There were also protests at Coca-Cola's Mehdiganj plant in North India over similar issues. In addition to these accusations, in 2003, the Center for Science and Environment (CSE),6 made public the findings of its study wherein it reported that the products of both Coca-Cola and PepsiCo Inc. (Pepsi) that were sold in India, had a cocktail of harmful pesticide residues in them.

In an official statement, Coca-Cola denied that it had used death squads in Colombia. The company said that two judicial investigations in the country had not found any evidence in support of such allegations. Coca-Cola also claimed that there was no evidence linking it or its bottlers with the groundwater problems at its factory locations in India...

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Background Note

The Coca-Cola drink, popularly referred to as 'Coke', is a kind of cola, a sweet carbonated7 drink containing caramel8 and other flavoring agents. It was invented by Dr. John Smith Pemberton (Pemberton) on May 8, 1886, at Atlanta, Georgia in USA.

The beverage was named Coca-Cola because at that time it contained extracts of Coca leaves and Kola nuts.9 Frank M. Robinson (Robinson), Pemberton's book-keeper and partner, who came up with the name for the drink, suggested that it be spelt Coca-Cola rather than Coca-Kola because he thought the two C's would look better while advertising. Robinson designed the now world famous Coca-Cola trademark as well. Pemberton later sold the business to a group of businessmen, one of whom was Griggs Candler (Candler). By 1888, several forms of Coca-Cola were in the market competing against each other. Candler acquired these businesses from the other businessmen and established The Coca-Cola Company in 1892. He aggressively marketed the product through advertising, distribution of coupons and souvenirs, and promoted the brand name Coca-Cola...

Excerpts >>

5] The British Broadcasting Corporation (BBC) is a publicly-funded radio and television broadcasting corporation of the United Kingdom. (Source: http://en.wikipedia.org/wiki/BBC)

6] Center for Science and Environment (CSE) is an independent, non-governmental organization which aims to increase public awareness on science, technology, environment, and development. CSE was established in 1980 and is based in New Delhi.

7] Carbonation, which involves dissolving carbon dioxide, is used in aqueous solutions like soft drinks to make them effervescent.

8] Caramel is a food which has a brown colour and a sweet toasted flavour. Caramel can be made from sugar by heating it slowly to around 170C.

9] The kola nut is a kind of a nut with a bitter flavor and high caffeine content, and is primarily obtained from some West African or Indonesian trees.

 

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