Counter-Cola: A Multinational History of the Global Corporation

Chapter Outline

Coke’s near global ubiquity resulted from one of the world’s first and most successful examples of international corporate franchising. The Coca-Cola Company’s material production was structured through contracting the manufacture of soft drinks out to “local, independent” bottlers. The Company sold concentrates and the rights to use its trademarked brands to franchise bottlers who would locally produce and sell bottled soft drinks in designated geographic areas around the world. Chapter 1, “The Coca-Cola Bottling System and the Logics of the Franchise,” narrates the establishment of franchise bottlers in Colombia and India from the 1920s through the 1940s. The franchise system enabled international expansion without large corporate growth or direct local employment, allowing the Company to externalize liability and financial risk. The franchise also helped the Company situate and integrate Coca-Cola’s production within international contexts, conscripting local elites, workers, and consumers into relationships with its industry. Thus, there were social and cultural logics to the franchise system that partnered with its economic motivations and impacts.[i] The franchise organized social relations, proposed engagements, and built commitments between people in various parts of the world. While it externalized production, it structured and inspired international interconnection among those involved in Coca-Cola production and consumption. Coca-Cola’s franchise system also had cultural logics, or aesthetic features, communicative strategies, and modes of representation, most prominently portrayed in advertising and Company cultural production, but also in popular representations of Coca-Cola. These social and cultural logics were articulated through different terms to meet the ideological demands of different eras, but were the means through which the Company attempted to construct its industry, products, and brands as simultaneously global and local at various historical moments. As described in the first chapter, at the earliest moment of the Company’s globalization, these logics framed the US multinational as a purveyor of international modernity through a local franchise, representing Coca-Cola as a new, innovative and stylish alternative to traditional and local beverages and businesses in countries including Colombia since the late 1920s. Asserting its franchise bottlers as both “local” and conduits to international capitalist modernity, Coca-Cola sold its industry, products, and brand by alluding to their international popularity and profitability.

Chapter 2, “Mediating Coca-Colonization: Negotiating National Development and Difference in Coca-Cola’s Postwar Internationalization,” examines Coca-Cola’s massive expansion of its international business after World War II in Colombia, the newly independent nation of India, and other countries around the world. In the United States, Coca-Cola represented itself as a commodity ambassador for the “American Century.” But in the postwar decades, many nations turned to more nationalist development economics, including Keynesian and import-substitution industrialization models, and a popular critique of economic and cultural “coca-colonization” emerged. The Company celebrated the cultural differences of the locales where Coca-Cola was drunk to exemplify its local acceptance and the universal adaptability of consumer capitalism. Critically, Coca-Cola mobilized new social and cultural logics of the franchise with the language of import substitution to frame its franchise bottlers as modernizing developers of local economies because of, not despite, their relationships with the multinational corporation, trumpeting what I call a “multinational developmentalism.” While such claims of local ownership often contained some truth, as in the case of the Indian-owned bottling company Pure Drinks, the US-controlled Colombian bottling company Panamco, to cite another example, was in reality neither local nor independent.

The expansion of the Coca-Cola system’s material production of soft drinks was possible only because of the Company’s investment in the immaterial production of advertising; promoting its soft drink brands and imbuing them with meaning, turning bubbly drinks into Coca-Colas or Sprites and sold them to consumers around the world. For decades the Company’s “pattern advertising,” in which texts were produced centrally, then disseminated to international markets for modification (achieving a degree of localization), reflected US racial and cultural hierarchization and promotion of consumer culture. The 1960s “social revolutions,” as a Coca-Cola executive called them, posed significant social and cultural threats to the Company even attacking its business practices and using Coca-Cola as a symbol of global capitalism’s exploitation and consumer culture’s homogenization.Chapter 3, “‘I’d Like to Buy the World a Coke’: The ‘Real Thing’ and the Revolutions of the 1960s,” considers these threats against The Coca-Cola Company, from direct challenges to its business operations to artistic and cultural expressions that made use of its brand image, to argue that the Company attempted to representationally assimilate the feeling of the era and contain its critiques. Some of the Company’s first international TV campaigns incorporated cultural elements of these revolutions, using race, gender, nationality, and cultural difference to signify authenticity and rebellion, and attempted to represent itself with the utopian, liberatory social values of a perceived global youth culture. With iconic advertising like “I’d Like to Buy the World a Coke,” the Company prefigured neoliberalism in its corporate globalist image of a new, more integrative and unified free market—one world liberated through consumption of a global commodity, Coke.

In 1977, adopting a new stance toward foreign corporations, the Indian state dramatically evicted The Coca-Cola Company from the country. Chapter 4, “Indianize or Quit India: Nationalist Challenges to Coca-Cola in Postcolonial India,” elucidates the political, economic, and cultural forces that drove one of the greatest challenges to the Coca-Cola world system—the threat of nationalization of its foreign nodes of business. The Coca-Cola Company’s departure from India in the late 1970s reflected a broader phenomenon: the reverberation of the political economic critique from dependency theory and concerns about neocolonialism through the global south. The Indian government pointed out the dependency structured into the franchise system, arguing that the Company was draining the country of necessary financial resources by repatriating its profits in foreign currency to the United States. Why should a multinational be making such large profits selling a nonessential product like soft drinks? Indian industry could surely produce bubbly drinks on its own, the government reasoned. India’s Foreign Exchange Regulation Act of 1973 (FERA) required that Coca-Cola “Indianize” its operations in the country—divest at least 60 percent of the ownership of its Indian subsidiary to Indian shareholders and transfer technological “know-how” to Indian employees—in a national challenge to two fundamental systems of property in global capitalism, financial and intellectual capital. Claiming a defense of its “secret formula” as intellectual property, the Company refused a larger Indian role in its Indian subsidiary while launching a campaign to rebrand itself in the discourse of “Indianization,” before dramatically pulling out of the country entirely.

Chapter 5, “A Man in Every Bottle: Labor and Neoliberal Violence in Colombian Coca-Cola Bottling,” examines the bottling system’s reconfiguration in the 1990s and 2000s as a result of consolidation, restructuring, and financialization, and the organizing of the Colombian food and beverage workers’ union, the Sindicato Nacional de Trabajadores del Sistema Agroalimentario, or Sinaltrainal, in the face of resulting labor precarity. This “precarization,” as they termed the process of livelihoods and lives being made insecure, was enabled in large part by the Colombian state’s outsourcing of violence to paramilitaries who targeted not only guerrilla fighters, but also leftists and perceived threats to the social order, resulting in the assassination and persecution of Sinaltrainal members. At the same time, the Company capitalized on the neoliberal shift in Latin America to consolidate a Latin American mega-bottler and node in the Coca-Cola world system, while significantly decreasing local labor power. In this context, work at Colombian Coca-Cola bottling plants was downsized, “flexibilized,” and subcontracted, challenging Coca-Cola workers’ abilities to support themselves and their labor organizations. In the midst of this ongoing armed conflict, and after protracted labor struggles, repeated acts of violence, and the loss of union membership, Sinaltrainal members denounced The Coca-Cola Company’s labor model and complicity in violence and joined with US-based solidarity activists to challenge the Company through work actions, a boycott of its soft drinks, and a US lawsuit. Together these activists built arguably the most significant transnational labor campaign of the 2000s. But international calls to action did not easily translate into solidarity in different economic and political contexts: the US and European labor movements offered limited support, student activists were often hemmed into actions that defined them as consumers, and organizers often indulged in oversimplified human-rights discourses, which at times elided the workers’ more trenchant calls for radical change. Through the franchise system, the Company externalized the human costs of its labor practices and shielded itself from legal responsibility. But Colombian workers insisted on their own centrality to the Company, together with international allies creating an alternative network of pressure on the corporation by remapping the Coca-Cola world system.

As economic liberalization opened up new international markets to foreign corporations in the 1990s, The Coca-Cola Company invested heavily in the “vast markets that were closed or underdeveloped for decades,” in its words, including India.[ii] The Company burst back into India in 1993 after a sixteen-year absence, buying up the largest Indian soft-drink company, Parle, and appropriating Indian popular culture in advertising in an attempt to localize its products and construct Coke as a constitutive part of contemporary “Indianness.” While making these efforts to portray Coke as Indian, Atlanta in fact directly controlled more Indian Coca-Cola bottling than ever before. Coca-Cola’s sudden reappearance made it a highly visible and tangible representation of India’s liberalization. Thus neoliberal privatization, underregulation, and underinvestment by the state, as well as widening economic inequality, evoked powerful responses from consumers and communities, including two environmental challenges to the Company addressed in chapter 6, “Water for Life, Not for Coca-Cola: Commodification, Consumption, and Environmental Challenges in Neoliberal India.” First, an NGO revealed the pesticide contamination of Coca-Cola and other bottled drinks, resulting in a middle-class crisis of consumer confidence in the quality of commodities produced by global corporations and calls for greater regulation of food safety and investment in water infrastructure. Second, villagers living around bottling plants challenged the Company over its privatization and pollution of the common water resources upon which their rural agricultural communities depended. This “environmentalism of the poor”[iii] and its critique of neoliberalism’s “accumulation by dispossession”[iv] galvanized international pressure against Coca-Cola.

Such critiques have challenged the Coca-Cola world system’s economics, politics, and cultures, requiring the corporation to continually justify its place in society. This dialectical process of corporate power, social confrontation, and efforts to reestablish capitalist hegemony defined the history of the Company—and, indeed, capitalism itself—in the twentieth century. At the beginning of the twenty-first century, confronted by Indian peasants, Colombian workers, and consumers and public health advocates concerned about the link between soda consumption and unprecedented obesity and diabetes rates, The Coca-Cola Company framed justifications for itself through the discourse and practice of “corporate social responsibility.” As with all Coca-Cola products, CSR has been as much symbolic as material and thus part of a larger effort to rebrand the global corporation. The concluding chapter of Counter-Cola, “CSR: Corporate Social Responsibility and Continued Social Resistance, A Nonconclusion,” argues that the Company’s leadership in the field of CSR is part of a neoliberal shift in the relationship between states, corporations, and the public. These CSR initiatives are intended to maximize long-term profit by contributing to the common good through private voluntary solutions to public problems, thus managing social risks to brands and forestalling governmental regulation. Coca-Cola’s high-profile CSR initiatives around the world—organizing the private sector to address poverty and violence in Colombia, pledging to become globally “water neutral” by conserving water reserves and creating alternative water sources in locations including India, and addressing growing obesity by encouraging exercise and marketing healthy drinks—simultaneously attempt to ameliorate the worst effects of capitalism while seeking to further legitimize the corporation’s prominent place in the world order. Not only do they help The Coca-Cola Company continue to sell soft drinks, they sell the ideology that the market will provide solutions to society’s problems; that there is no future without capitalism.

But capitalism creates more problems than it solves, and struggles will continue to arise. The Coca-Cola Company has been formed by these struggles; its bottled drinks, brands, and business were produced by the corporation, but always in concert and conflict with the consumers, communities, and workers who make it a “real thing.”At its broadest level, this book argues that the power to both shape and represent global capitalism is contested, and that the process of contestation is itself the central dynamic of modern history.
 
 
[i] See Fredric Jameson’s classic theory of the “cultural logic of late capitalism” in Postmodernism, or, The Cultural Logic of Late Capitalism (London: Verso, 1991) and Randy Martin for an analysis of the “social logic” of a capitalist form, the derivative, in “After Economy? Social Logics of the Derivative,” Social Text 114, no. 1 (Spring 2013).
[ii] TCCC, “The Coca-Cola System – History of Bottling,” accessed November 2, 2008 http://www.thecoca-colacompany.com/ourcompany/historybottling.html
[iii] Joan Martínez-Alier quoted in Ramachandra Guha, How Much Should a Person Consume? Environmentalism in India and the United States (Berkeley: University of California Press, 2006), 59.
[iv] David Harvey, The New Imperialism (Oxford: Oxford University Press, 2003), 159.

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