Coke finds its bright spots in faraway places

These positive results allowed Coke’s CEO E. Neville Isdell, to project a note of optimism amid otherwise lacklustre results. Coke’s overall earnings declined 6 per cent, to $1.5 billion, and revenues increased 4 per cent, to $5.3 billion.

In her first earnings conference call, Mary E. Minnick, recently named to head marketing, innovation, and growth strategy, described the importance of Asia to Coke’s future growth. “Our star is China,” she said. “We’ve had double-digit growth there over the last few years.”

She noted that in Japan, which is Coke’s most profitable market, 34 per cent of its volume comes from drinks that are not sodas, versus 17 per cent as a whole.

Events in distant and developing markets were also the centerpiece of Coke’s annual shareholder meeting, held on Tuesday in Wilmington. The meeting was dominated by a vocal group of shareholders and political activists who accused Coke of complicity in human rights abuses in Colombia and irresponsible water use in India.

In his first annual meeting since taking over as CEO last May, Isdell listened to impassioned criticisms from more than a dozen people who got up to speak. Each time, he denied the accusations.

Ray Rogers, director of a group called the Campaign to Stop Killer Coke, said the company, through its Latin American bottlers, was complicit in the deaths of eight union leaders who worked as employees in several of its bottling plants in Colombia. A shareholder resolution from the group called on Coke to conduct an independent investigation into the murders and what they say is continued harassment of unionised employees.

Isdell responded: “As a former student activist, I came to the Colombia issue with an open mind.” He added: “But ultimately I came to the conclusion that the allegations are not true.”

Isdell highlighted findings from a report the Cal Safety Compliance Corp completed last week for Coke. The report found no violations or abuses of labour or human rights in Coke’s bottling plants in Colombia. Coke also came under fire from the activist group Corporate Accountability International, which claims that the company has contrbuted to water shortages in several regions throughout India. Corporate Accountability International said since Coke started its bottling operations in the late 1990s, several villages have experienced lower groundwater levels, sharply reducing water for irrigation and drying up public wells.

“In India, your bottling facilities have had devastating impacts on local communities,” said Gigi Kellett, a representative from Corporate Accountability International, addressing Isdell. “Your operations have drained so much water that at least five Indian communities face severe water shortages and health problems.”

Isdell denied any link between Coke’s bottling operations and water shortages in India. In Kerala, he said, “The depletion of the water table continued at the same pace even though our plant has been closed for the past year.”

— NYT