Coke's Got an America Problem

The Coke Machine:
The Dirty Truth Behind the
World's Favorite Soft Drink
By Michael Blanding
Avery, 384 pp, $26

A quick note to Coca-Cola's (KO) PR office: Let's stipulate that you deny just about everything in this book, starting with Michael Blanding's initial assertion that the company's 19th century patent medicine was laced with cocaine. A writer for The Nation, The New Republic, and other magazines, Blanding thoroughly chronicles the company's every major misstep and act of hypocrisy. He doesn't explore new terrain, but he raises important questions about what we can expect of major companies—and from muckraking journalism.

According to The Coke Machine: The Dirty Truth Behind the World's Favorite Soft Drink, the world's most successful soda company doesn't just rot your teeth—it's responsible for drought, disease, exploitation, and possibly even murder. It's tough stuff to swallow—and that's basically the point. Among Coca-Cola's vast array of crimes against the human race, says Blanding, are ads that target children and unsophisticated Mexican peasants with messages implying the sugary beverage makes you sexy, happy, and patriotic. Dasani, its bottled water brand, is hardly any better than what comes out of your tap. In India, he alleges, Coca-Cola's bottlers have sucked up scarce water supplies. And in Latin America, the company has shown active disregard for the employees of its local bottlers who get caught in the cross-fire of ideological conflict.

There is, as his title states, some "dirty truth" in all these accusations (and, yes, there's more). However, Blanding may be underestimating the sophistication of his audience. A generation of readers informed by Eric Schlosser and Morgan Spurlock won't find it revelatory that a 12-ounce soft drink with 39 grams of sugar doesn't make you sexy. Others, immune to meaningless corporate names like Verizon or Altria, won't be bothered by the fact that the insipidly titled Dasani isn't even as good as the insipidly titled Brita. In a prosperous country suffused with needless frills, are many of us obsessing about $4 cups of coffee? Though he never says it, what may irk Blanding the most is that Coke tastes good—and that's what most consumers care about.

Overseas, there is more nuance to the Coke story than the author admits. In India, Coca-Cola bottlers used a lot of water and may have emitted pollution, but they did not cause drought, as some critics claimed. In fact, the company seems to have done the right thing in closing a big bottling plant that stirred intense local suspicion and resentment.

As for the murder allegation, Blanding recounts how Colombian right-wing paramilitaries killed eight workers in Coke bottling plants in the mid-1990s. The deaths occurred during the hit squads' guerrilla war against unionists and leftist revolutionaries. Through franchise contracts and partial ownership, Coca-Cola exercised influence over the plants but didn't directly control them. Some labor activists believe—without any direct proof—that executives at Coca-Cola's Atlanta headquarters must have orchestrated the deadly union-busting. The corporation protested its innocence, and U.S. judges summarily dismissed a suit seeking to hold it liable.

As Blanding rails on, it's difficult to avoid the suspicion that his objections are rooted less in a deep dissatisfaction with Coke than in one with capitalism itself. Take his portrait of Asa G. Candler, the Atlanta pharmacist who incorporated the company in 1892. Candler was, by most accounts, a visionary whose franchise system spread financial risk to independently owned bottlers and made Coca-Cola an engine of Atlanta's growth. Introspective and austere, he pondered the duties a tycoon owed his community. Blanding describes this apparently genuine inner struggle with condescension. Candler, he writes, was ashamed of the "obscene profits he made from such an ephemeral product." Throughout the book, profits are described with disdain, as though the purpose of business is to go broke. The author adds: "Candler was deeply ambivalent about the power of altruism—happy to give his money away for the greater good when he was in control of who received it." What's so bad about that?

It's an unfortunate reality that owners and executives live much better than factory workers. On the other hand, factory workers have jobs that feed their families and, one hopes, allow them to send their children to college to one day become executives, themselves, or poets. Advertising may annoy and distract, but it also helps move the products that keep the factories running—and who doesn't enjoy those Coke-drinking polar bears?

A more balanced view of Blanding's evidence suggests that Coca-Cola turned into what most large companies become over time: an amoral, earnings-driven, potentially harmful, but also potentially beneficial, employment- and tax-generating bureaucracy. By this point, we all know that Coke is not exactly a health beverage, and that the company is less than a crusader for human rights. Doing business in chaotic, violent countries presents a real dilemma to multinational corporations. People in Colombia may not need Coke, but they seem to like it and they can use the bottling jobs. Without a doubt, the company has had some very bad ideas, and not just New Coke. For years, it paid public school districts to get soda machines into cafeterias. Yet it seems highly relevant that school superintendents eagerly took the company's money, until activists blew the whistle. The lesson? Beware corporations suggesting quid pro quo arrangements; they're not driven by generosity.

Critical assessments of powerful corporations—whether from regulators, activists, or journalists—provide a vital check on free-market excess. The problem with a litany of undifferentiated accusations, however, is that it denies ambiguous reality. Simplistic screeds undercut the credibility of legitimate consumer protectionism and relieve the rest of us of our responsibility to exercise common sense.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE