How a Major Turf War Between Pepsi and Coke Reveals There's No 'Good' Multinational Soda Company
Last month PepsiCo won a battle in the cola wars against Coca-Cola when the City University of New York awarded the global conglomerate exclusive pouring rights in a $21 million deal to distribute its beverages to all 24 of CUNY's campuses.
Leading up to the decision, students and activists had crusaded relentlessly in the "Killer Coke" campaign against Coca-Cola’s presence on campus in an effort to expose its poor record of labor and human rights abuses, particularly with regard to the murder of union leaders in Colombia. The effectiveness of their campaign resulted in CUNY rejecting Coca-Cola's latest bid.
“The real drive behind that resolution was that we don’t do business with corporations that have issues with human rights and workers’ rights,” said David J. Rosenberg, the president of the student government on the Brooklyn campus.
But while campaigners deemed the move a victory against the corporate giant, any sense of triumph was quickly overshadowed by CUNY’s announcement that Pepsi would take its place. Officials attributed the switch to a better offer from Pepsi.
“[Pepsi’s] proposal offered a variety of products and a level of support and a total royalty number that was superior,” Michael Arena, a spokesperson for CUNY told the New York Times.
The decision is a slap in the face for activists who, after working tirelessly to boot Coke, are now faced with another transnational company that essentially reintroduces many of the same concerns as its predecessor, namely: a company concerned only with profit at the expense of the health and general wellbeing of the population.
Both Pepsi and Coke have been accused of producing unhealthy products, promoting false marketing campaigns and fueling the obesity epidemic in the United States. Both have also attempted to vary the way people think about water, from a basic human right to something to be bought and sold, through their bottled-water marketing.
As Michele Simon, president of Eat Drink Politics and author of Appetite for Profit: How the Food Industry Undermines Our Health and How to Fight Back explained to AlterNet, “It is sad to see universities who are trying to do the right thing by keeping out a company like Coke with a horrible track record to then allow Pepsi, which may not be killing people in South America but is killing people in other ways, to take its place.
“It is a sign that we are not looking at this issue in the right way. Too often we are focused on one aspect of how a corporation does business, comparing evils to slightly lesser evils. I don’t think having vending machines with either of these products whatsoever is very settling. While we don’t want to discourage universities from activism, to replace Coke with Pepsi isn’t a victory,” she said.
While Pepsi has spent a vast majority of its PR campaigns focusing on how it actively participates in initiatives to address water challenges around the world, the impetus behind such a move is nothing more than a coordinated effort to promote a “profit-driven privatization scheme that undermines the human right to water and local, democratic control of global water resources,” as Corporate Accountability International (CAI) explained to AlterNet:
“Pepsi’s involvement with the 2030 Water Resources Group demonstrates how it has been colluding with water intensive industries and powerful institutions like the World Bank to make private controls of water by setting up water-for-profit systems," said Erin Diaz, campaign director of Think Outside the Bottle and Public Water Works at CAI. "In each of these Pepsi-funded projects, water rates are tied to paying off private investments from multinational corporations.”
CAI claims that Pepsi’s water mandate undermines the government’s effectiveness and credibility while advancing the corporation’s own interests in water governance by focusing on directing water policy in favor of private use. This directly contradicts the UN human right to water for domestic and personal use as well as Pepsi’s own stated commitment to operate with respect to the human right to water, as CAI organizer Julia Gabbert explained.
“These stations offer chemically treated water to community members at rates that are triple to what public water systems can provide in similar areas. These water rates are set by the need to repay private investments in the infrastructure needed to create the chemical treatment machinery, not by the ability of community members to pay,” she said in a statement addressed to PepsiCo at the corporation’s annual shareholder’s meeting.
In response to CAI’s allegations, Pepsi CEO Indra Nooyi sidestepped the issue, saying, "We are writing the rules on water conservation. We are writing the rules on public-private partnerships".
However, according to CAI's Erin Diaz, when it comes to something as essential to life as our water, Pepsi, a profit-driven transnational corporation, has no business writing the rules:
"Decisions that affect people's access to water around the globe need to remain with the people—through our public, democratic systems," she said.
Pepsi failed to respond to AlterNet's request for comment.
The controversy surrounding Pepsi’s corporate practices doesn’t stop there.
Water quality: In 2003, Pepsi was criticized for the quality and quantity of water used in its beverages after the Centre for Science and Environment discovered that the water PepsiCo and other beverage companies in India were using contained toxins including pesticides which contribute to cancer. According to Daniels Fund Ethics Initiative, the CSE found that Pepsi had 36 times the level of pesticides permitted in tap water. As a result the Indian state of Kerala temporarily banned the sale of Pepsi.
In 2007, Pepsi’s Aquafina water brand was accused of using tap water to fill its bottles. Corporate Accountability International claimed Pepsi was not being transparent in its business practices and using falsely misleading advertising to suggest its water was from purified spring water when it in fact came from the tap. As a result of the watchdog’s group efforts, Pepsi placed the words “public water source” on its label.
Pepsi has spent billions of dollars on bottled-water campaigns brainwashing consumers that the safest place to get water is out of a bottle when in fact this isn’t the case. Most Americans don’t realize that water quality and labeling laws are not as strict in the US when it comes to bottled water versus tap water so people are actually paying 10,000 times the cost of tap water for the privilege of drinking an inferior product, according to SaveTheWater.org
Environmental impact: Pepsi’s bottled beverages negatively impact the environment. In the United States, plastic bottles create billions of pounds of oil-based trash a year. One bottle of water takes 700 years to decompose with production of plastic water alone amounting to 2.5 million tons of carbon dioxide.
Pepsi has been criticized in the past for the amount of plastic bottles it contributes to land fill. A study conducted in 1992 found that PepsiCo India and other similar companies created 10,000 metric tons of plastic through their manufacturing and importation processes. In 2006, farmers raised similar concerned about mass pollution resulting from Pepsi bottles.
Sexist iPhone app: In 2009, Pepsi came under fire for the release of its AMP Energy Drink iPhone application. The app allowed users to categorize women into groups and give them clues about ways to “score” allowing the user to create a “brag list” with names and details of women and then upload the lists to Facebook and Twitter. The company apologized for the app and claimed it was just trying to be humorous.
Use of aborted fetuses: In 2012, Pepsi was accused of using aborted fetal cells in flavor research, which caused outrage among pro-life groups calling for a boycott of the product. While there were no aborted embryonic cells reportedly used in any of the products, aborted cells were used in the development of artificial flavor enhancers by biotech company Senomyx for research and development. While Pepsi denied the accusations, arguing it wasn't taking the cells directly from fetuses, it did not deny the allegation in its entirety.
Health concerns: Despite Pepsi boasting a number of healthy products in its marketing campaigns, such as Quaker Oats, its most popular and highest grossing product to date is Pepsi-Cola, according to a 2012 Eat Drink Politics Report on PepsiCo and Public Health. While Pepsi has released a number of products with zero calorie alternatives to sugar such as Stevia, health experts say the human body’s ability to process sweeteners is no greater than the ability to process sugar and can in fact be more harmful.
Author of the report and public health lawyer Michele Simon explained to AlterNet that most of the corporate profits at PepsiCo derive from nutritionally deficient products such as sugar-loaded soft drinks that Americans need to eat less of.
“We have a public health disaster on our hands with poor diets causing heart disease, obesity related problems and diabetes. Eating habits are formed when we are young and at present we have college students relying on caffeine and sugar-related products to stay up all night," she said. "This causes serious health issues and raises major culpability issues amongst corporations because these products are simply empty calories with no nutritional benefit."
In Simon’s opinion, the most troubling aspect of diet is diabetes. Our country’s obsession with weight and no-fat foods has caused us to lose sight of the bigger picture -- preserving our metabolism. By consuming too many refined sugar products such as those in Pepsi drinks designed to make us lose weight, we are in essence damaging our bodies.
“There is no question that we are on the brink of a health crisis and what is coming is worse. Children are being diagnosed with Type 2 diabetes, traditionally called adult-onset, because we have overloaded our kids with too much sugar," she said. "We have a new generation growing up being sick and that’s going to put more strain on healthcare system. We have brought this on ourselves by the nature of the food environment because companies market 24/7 and people are hooked on tasty beverages and so we are physically paying the price.”
So what is the answer to solving the crisis? Clearly any governmental ban or regulation on soda drinks is not going to work as New York City Major Michael Bloomberg discovered. The politician’s health plan to keep large sugary drinks out of restaurants and eateries by introducing a law prohibiting businesses from selling soda and other sugary beverages larger than 16 ounces was dubbed unconstitutional and rejected by the state Supreme Court this year, despite the fact that Bloomberg claimed more than 2,000 New Yorkers had died from diabetes since March 12 when the law was struck down.
Simon says corporate transparency is a good way to begin: “It’s about exposing corporations for what they are about – marketing and selling their products at all costs and engaging in PR campaigns to make it look like they are the good guys by covering up their tracks. The emphasis needs to be on the types of marketing and PR lobbying practices that the industry engages in so people understand that what they are selling is not the truth,” she said.
Other suggestions to curb consumption include taxes on sugar, restrictions placed on advertisements, and even age requirements on purchasing sugary foods. However, many argue that such measures impinge on our personal freedoms and would give the government excessive control over aspects of our diet and lifestyle. Moreover critics say regulations would be futile and not fix the obesity epidemic.
It’s no secret that as a society we’re hardwired to want sugar – it’s addictive and corporations know that and will always be motivated by profit. It is therefore the responsibility of the government to put forward viable alternatives to counter this mentality in order to protect the general welfare of its citizens.
Government-led advertising campaigns that raise awareness and offer feasible substitutions to sugar drinks could therefore be effective as a solution. Such measures could be as achieved through promoting healthy, natural alternatives such as drinking club soda and squeezing a dash of lemon as a replacement for artificially flavored lemon water, which in the long run would improve our health and wellbeing.
As the cola wars continue, the role of activism in exposing multi-national corporations should not be underestimated. While Pepsi won the latest battle, the efforts of CUNY students in raising awareness through the “KillerCoke” campaign is a powerful example of how “people-power” can directly pressure other powerful players around the globe to listen and make changes.