Company Developments at Coca-Cola

Posted to the IUF website 05-Mar-2001

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Following the numerous problems that affected the Coca-Cola Company in 1999 and the selection of a new CEO, Doug Daft, the company has tried rather desperately to refurbish its structure and image.

The slashing of 6,000 Atlanta headquarters positions and the dispersal of marketing functions to other regions is intended to reduce delays in making decisions and mistakes caused by Atlanta's distance from Coke's global markets. Multiple layers of bureaucracy were seen to be interfering with market decisions in the field. Daft, whose experience was mainly in the Asia/Pacific region, is a strong advocate of decentralisation.

CCC will remain a marketer of non-alcoholic beverages, but with more local brands depending on local tastes. The flagship Coke brand is to be supplemented by non-carbonated beverages, waters, sport drinks, etc. However PepsiCo acquired Quaker, including the Gatorade brand, when Coke's board refused to endorse its costly acquisition. Coke�s failure to acquire Gatorade leaves it a global second to its rival PepsiCo in the rapidly growing sector of non-alcoholic, non-carbonated beverages.

However Coca-Cola continued to suffer serious problems in 2000. Settling a racial discrimination case for its treatment of its black employees cost nearly USD 200 million. And volume sales growth remained well under that achieved before 1998. Coke's most valuable asset, its brand valuation, decreased by some $13bnUS in that time.

Daft's anti-centralisation rhetoric does not change our trade union strategy for dealing with Coca-Cola, which is based on our insistence that the CCC be held responsible for the entire system�s labour-management practices. The Coca-Cola Company itself has very few non-managerial employees. Most Coca-Cola employees are employed by Coke's anchor bottlers, the largest of which, Coca-Cola Enterprises with its greater experience with unionised employees has behaved more fairly with respect to the EWC in Europe.

To date the Coca-Cola Company remains unwilling to enter into discussions with the IUF for any agreement on trade union rights for those employees it directly or indirectly controls.