Irish Coca Cola Boycott Spreads
The Irish response to the call for a boycott
of Coco Cola because of the ongoing campaign of murder of workers
in Coca Cola bottling plants in Colombia is spreading. On Saturday
11th October 2003 the John Hewitt Bar and Restaurant one of Belfast's
best known and most prestigious bars became the first public house
in Ireland to remove Coca Cola from its shelves.
Then it emerged that the Cultúrlann
McAdaimh Ó Fiaich an Irish language cultural centre and one
of the foremost tourist centres in Belfast has also stopped serving
Coca Cola to its customers.
Now the students of University College Dublin
the largest student campus in Ireland have voted in a referendum
not to serve Coca Cola in any student union outlet on the campus.
Campaigners for the boycott are buoyed up
by the growing success of the call to boycott Coca Cola and are
seeking to spread the boycott as quickly as possible to other drinks
outlets.
The quicker Coca Cola get the message and
take steps to stop the murders and ill treatment of workers in their
subsidiary plants in Colombia, the better for all concerned.
Now is the time to spread the boycott as
far and as fast as possible. Individually each of us can stop drinking
Coca Cola and urge others to do likewise. Make your view known to
your local drinks outlet and ask them to withdraw Coca Cola from
their shelves and stock an alternative.
Among the alternatives available are Mecca
Cola (www.mecca-cola.com)
which can be ordered at TOPMARK, Carry and Carry distributors Linfield
Industrial estate, Sandy Row, Belfast, 02890 435870.
BRIEFING NOTE - Coca-Cola's Bottling
Companies
Coca Cola's website page on Colombia states
that:
"The Coca-Cola Company has bottler
agreements with independent companies that own and operate 20 bottling
plants that manufacture and distribute Coca-Cola products."
This note looks only at company ownership,
let alone common branding, company policies and practices that bind
contracted bottlers to Coca Cola. Let us investigate just
how 'independent' Coca-Cola's bottlers really are.
Coca Cola's main bottler in Colombia is called
Panamco Colombia, it operates 17 out of the 20 plants, and is a
subsidiary of Miami based Panamerican Beverages Inc, (Panamco).
Panamco was one of Coke strategic 'anchor bottlers'. In December
2002 another major bottler, the firm Coca-Cola FEMSA announced it
would buy Panamco for $3.6 billion. This acquisition was completed
six months later.
Since, according to the South Florida Business
Journal "Coca-Cola owns about one-fourth of Panamco",
the buy out involved Coca-Cola Co. receiving about 304 million shares
of Coca-Cola FEMSA worth $674 million, in exchange for its Panamco
shares.
While Coca-Cola Co. owned 25% of Panamco, it also
already owned 30% of Coca Cola-Femsa. The buy out leaves Coca-Cola
Co. with 40% of the combined entity Coca-Cola Femsa-Panamco.
Coca-Cola FEMSA-Panamco will have revenues estimated
at $4.6 billion and estimated annual gross profits of $1 billion.
It is the leading bottler of Coca-Cola products in Latin America,
and with about 10 per cent of Coca-Cola's worldwide sales, the second-largest
Coca-Cola bottler (the largest is Atlanta-based Coca-Cola Enterprises).
The significance of the overseas bottling subsidiaries
for group profits is immense. According to industry analyst Milton
Boki "Coca Cola obtains 75% of its profits outside the US,
a considerable proportion of this comes from Latin America".
The merger is seen as complementary in two respects.
Geographically, FEMSA already dominated the Mexican and Argentine
markets. Panamco has brought with it a leading position in Brazil,
Colombia, Costa Rica, Guatemala, Nicaragua, and Venezuela. Through
FEMSA-Panamco, Coca-Cola bestrides Latin America.
As far as product lines are concerned, FEMSA is
already strong in beer as well as soft drinks in Mexico, where there
is a high consumption of soft drinks due to lack of adequate drinking
water. With limited public services breaking down, and with service
privatisations, failure to provide drinking water from the tap is
a continental issue, especially for the poor. Public services are
deteriorating, and the sale of bottled alternatives is an expanding
market with the potential to increase even more rapidly. Access
to the water market is part of the attraction of Panamco, and perhaps
why FEMSA paid so much for it. As noted by Boki "the purchase
of Panamco opens the possibility of using its enormous distribution
and marketing system to sell bottled water and other soft drinks
that are alternatives to the classic Coca Cola."
The Coca-Cola FEMSA Panamco takeover was completed
in June 2003. On 11th September, Panamco Colombia announced it would
"stop production at 11 of its 17 plants to boost efficiency"
We have seen that Panamco the bottling company is a vehicle for
Coke's expansion into the Latin American drinks market. But this
expansion only makes commercial sense so long as it is profitable
for the parent company.
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