* excerpts from a publication by Lokayat
Multinational corporations are huge. They are so big that they can gobble up entire countries. Of the largest 100 economies, 51 are corporations, 49 are countries.
Just a handful of MNCs now control global production in virtually every sector of the world economy. The 200 biggest MNCs account for over a quarter of the world’s production. Of the 200, nearly half are US-based MNCs, and they account for over half the sales of the top 200’s total sales. As Henry Kissinger, US secretary of state under Presidents Nixon and Ford, candidly remarked in a speech in 1999, globalization is another term for US domination.
Coca Cola and PepsiCo make their billions by capitalizing on the most basic human physiological need – thirst. Coca Cola says:
“All of us in the Coca-Cola family wake up each morning knowing that every single one of the world’s 5.6 billion people will get thirsty that day. If we make it impossible for these 5.6 billion people to escape Coca-Cola, then we assure our future success for many years to come.”
(from Coke’s Annual Report, 1993)
The story of how Coke-Pepsi became big
Coca Cola was invented in 1886 by John Pemberton, a pharmacist. Soda water was very popular in the US those days. Shopkeepers would add various extracts to the mineral water they sold at their soda foundations so as to please their patrons. Pemberton came up with the idea of mixing the extract of coca leaf – known to be an ideal nerve tonic and stimulant, with the extract of cola nut – another powerful stimulant said to invigorating and able to cure hangovers, and gave his product the name Coca-Cola. The combination of two powerful stimulants, accompanied by a massive advertising and sales drive – in 1913, the company sent a whopping $1.2 million on advertising and was adjudged the best advertised product in the United States. By 1929, Coke dominated the US soft drink market and was among the 125 largest US companies in terms of sales.
Pepsi was invented by Caleb D Bradham, also a pharmacist and a soda fountain owner. Sometime in the 1890s, he came up with a mixture that he labeled Pepsi-Cola as he felt that the drink could relieve dyspepsia (upset stomach) and the pain of peptic ulcers (hence the name). The drink never really became popular and the company went bankrupt in 1931. It was acquired by Charles Guth, who adopted a new marketing strategy to challenge Coke, and then he priced it in such a way that the customer would get the same amount of Cola at half the price. It was the years of the Great Depression. With Coke unwilling to lower its high prices because of its monopoly position, Pepsi’s pricing strategy clicked with customers and its sales took off. By the end of World War II, Pepsi’s sales were nearly one-third that of Coke. Having become big, it now abandoned its “Twice as much for a nickel” campaign; since then both giants have not indulge in price wars.
Coke-Pepsi become MNCs
At the end of World War II, the US emerged as the most powerful economic and military power on earth. The world was in turmoil. A powerful Soviet bloc had come into existence. Also, a wave of independence struggles was sweeping across the colonial countries. To keep the newly independent countries open for its trade and investment, the US adopted the strategy of: (i) military intervention, as in numerous Latin American countries, and (ii) giving loans and grants, to keep the atmosphere favourable for US investment. US Corporations, including of course Coke and Pepsi, now began to spread their tentacles worldwide, backed by a string of US military bases spread across the globe. In the 1980s, the Soviet bloc collapsed. The third world countries became entrapped in foreign debt crises, as a result of the loans shoveled down their throats. The US seized the opportunity to pressurize all these countries to full open up their economies to foreign investment – the so-called ‘globalisation’ of the world economy began.
Today these two corporations control over 70% of the world’s carbonated soft drink market, and their global sales exceed $50 billion. Since their profits depend upon making people drink more and more soft drinks, they use every trick in the book to make people drink more, with the consequence that the global soft drink market has been rising by 5% every year. Global annual consumption of carbonated soft drinks topped 186 billion litres in 2003, implying each person in the world drank an average of 30 litres per year.
In 1877, Chief Sitting Bull of the Lakota nation (in what is now the United States) said of the European invaders who were destroying his people and their way of life,
“The love of possession is a disease with them.”
Disease is an apt term, because the desire to possess more and more is not inherent to the nature of human beings, it is acquired. Prominent US historians have written of American Indians:
“they are all equal… Neither is richer or poorer than his companion and all unanimously limit their desires to that which is useful and precisely necessary, and are contemptuous of all other things, superfluous things, as not being worthy to be possessed…”
Despite what neoclassical economists may tell us, people do not have an inherent, insatiable desire to acquire more and more goods, to consume without end. The desire to possess and consume limitlessly is not inherent to the nature of humans, it has been artificially created, it is a product of capitalism. Anthropologists studying primate societies have found very different human relation and human nature than the highly competitive, dog-eat-dog, selfish characteristics that have dominated during the capitalist period. Ever since capitalism came into being 500 years ago, cooperation and sharing inherent among human beings has been downplayed, while aggressive competitiveness has been promoted so as to create the conditions for the growth of a system whose central feature is accumulation, accumulation and even more accumulation of profits. This in today’s world of monopoly capitalism has taken on a newer form, hyper-consumerism – to purchase, possess, consume, more and more without any relation to basic human needs or happiness. Buy, buy and buy, so that MNCs can make more, more and more profits…
Coke and Pepsi in India
Coca Cola came into the country in the late 1950s, when it used to be free at seminars to promote its taste and thus create a demand. By the 1970s, it had established itself in the Indian market. It was kicked out of the country in 1977, due to its refusal to accept Indian laws under which had to dilute its ownership stake in its Indian subsidiary to 40%. Since the 1990s, Delhi’s rulers have changed policies, and decided to allow corporate armies to trample over the country’s honour and dignity. So, Coca Cola too re-entered the country, in 1993. Once again it refused to comply with any of the conditions imposed on it by the government, such as diluting 49% – yes, only 49%, and not majority holding – in its bottling operations to resident Indians. The government bhaktifully bowed: in 2003, it diluted the conditions imposed on Coke.
Pepsi entered India in 1988, during the years when the country’s rulers were preparing the ground for globalization. It made several promises, such as that it would create 50,000 jobs, that 74% of its investment would be in food processing, that 50% of its production would be exported, and that it would set a farm research center in Punjab. Not one of these promises has been fulfilled; the government has meekly swallowed the insult.
It takes 9 litres of water to make 1 litre of Coke/Pepsi. Coca Cola and Pepsi companies have set up 90 bottling plants in India. Each plant draws on the average 1 million litres of ground water a day. (FREE. It’s a return to the good ol’ colonial days again). Such massive extraction of such a precious and scarce resource is causing ground water levels to fall, creating water shortages for people living in the regions where bottling plants are located. Wells are going dry. Hand pumps no longer work. On top of it, these giant corporation with callous disregard for the environment have indiscriminately discharging their toxic waste water into nearby fields and rivers, polluting the ground water and the soil, rendering the water unfit for human consumption. Coca Cola has even been distributing its solid toxic waste as free fertilizer to farmers.
Tests carried out by the Pollution Monitoring Laboratory of the Centre for Science and Environment (CSE) in Delhi of 12 leading drinks produced and marketed in India by Coca Cola and PepsiCo, showed that all samples contained residues of four extremely toxic pesticides – Lindane, DDT, Chlorpyrifos, and Malathion – at levels as high as 30 times those allowed by the United States and European Union standards. Following this report, in January 2004 the Indian parliament banned the sales of Coke as well as Pepsi products in its cafeteria. But not in the country! The people can go on drinking it. In fact , the quality of soft drinks manufactured by these corporations is so bad that on May 19, 2005, the US Food and Drug Administration barred a shipment of Coke products made in India from entering the United States. The grounds: the products were “unsafe” and “not conforming to U.S. laws”.
From Kala Dera near Jaipur in Rajasthan to Badauli near Panipant in Haryana, from Mehdiganj and Ballia and Jaunpur in Uttar Pradesh to Patna in Bihar, from Mandideep and Peelukhedi near Bhopal to Sivagangai and Gangaikondan in Tamil Nadu, from Kudus in the district of Thane in Maharashtra to Plachimada and Puduserry in Kerala, tens of thousands of people living in these regions are waging militant struggles, demanding closure of the bottling plants and compensation for the destruction caused to their health and their lands. the servile state governments have intervened on behalf of the corporations, and people have been subjected to intense police repression.
Pepsi-Coke Quit India!
Friends, Coke and Pepsi are symbolic of all MNCs. Multinational corporations are seeking to acquire control over what we eat, what we drink, what we read, what we see, what we think, so that they can maximize their proﬁts. We must throw off this yoke of mental slavery.
We must join the boycott of Coke and Pepsi:
– Not just because they are harmful to our health;
– Not just because through their manipulative advertising techniques they entice people into drinking their toxic brew;
– Not just because they are destroying the livelihoods of thousands of people in Plachimada, Mehdiganj, and other places;
We must support the movement to throw Coke and Pepsi out of India, also because:
– We need to assert that water is common property; giant cash rich corporations cannot be allowed to acquire control over it;
– We need to afﬁrm that Right to Water is a fundamental right.
Let us join this struggle and:
1. Boycott all Coke and Pepsi cold drinks.
2. Organise campaigns against Coke and Pepsi in our schools, colleges, ofﬁces, workplaces, residential colonies.
3. Impose a ban on Coke and Pepsi in our college canteens, ofﬁce canteens, union ofﬁces, etc.
4. Organise cycle rallies, form human chains, and adopt other such forms to reach out to people in the city we live in.
Lokayat is a social activist group based in Pune. The aim of Lokayat is to bring together like-minded people, ordinary people who wish to take some initiative, who wish to do their bit for transforming society for the better, and to take up various activities with their co-operation. Thanda Matlab – Coke-Pepsi Quit India! is a publication written by them to raise awareness and bring together people against the atrocities of the Coca Cola Company and Pepsi. It is written by Neeraj Jain. DOWNLOAD the PDF to know more.
These excerpts have be chosen and presented in acknowledgement of the Creative Commons Attribution-Share Alike 3.0 License, which Lokayat has chosen for this publication. Graphics by Chai Kadai.