Presentation by: Ankur Jain (MBEXE07130004) Rakesh Kumar (MBAEXE07130021)

THE COLA CONUNDRUM

•Introduction•Indian Context•Business Practices•Conclusion

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COCA-COLA’S HISTORY

Coca cola was concocted by pharmacist John Pemberton and was first introduced as a health tonic in Atlanta , Georgia in 1885.The company makes an annual profit of approximately US$15 billion and has a huge marketing budget of US$2million per annum.The company operates almost in all countries of world selling as many as 12,500 drinks every second.

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COCA-COLA IN INDIACoca-cola was India’s leading soft drink unit in 1977 when it was ‘kicked out” by Government of India after it refused to reveal its secret formula of coca-cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act. On its return in 1993, It took over ownership of the nation’s top soft-drink brands. It bought out for Rs 3500 million a clutch of popular Indian soft drinks brands including Thums up, Gold spot, Limca, Citra and Maaza which enabled them to get 66% market share.

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COCA-COLA IN INDIAThe vast Indian operation comprises 25 wholly company owned bottling operations and another 24 franchisee owned bottling operations. In India the company directly employs approximately 6,000 people and indirectly creates employment for more than 125,000 people in related industries though their vast procurement, supply and distribution system.These facts speak that Coca-Cola is an integral player in the Indian economy.

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CLAIM OF ETHICAL BUSINESS

CODE OF BUSINESS CONDUCT: This code serve as guide to company`s action, advancing and protecting core values of Honesty, Integrity, Diversity, Quality, Respect, Responsibility and Accountability.

ENVIRONMENT POLICY: It promises to operate company`s facilities taking into account all applicable environment safety and health rule.

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CLAIM OF ETHICAL BUSINESS

QUALITY OBJECTIVE: Keeping high quality promise in marketplace is their long term business objective.

Company promises to provide consistently attractive return to the owners and to their business.

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GUIDING PRINCIPLES FOR SUPPLIERS

Good corporate citizenship for long term business success.

Fair employment practice with employees with a commitment to human right, at workplace.

Employ labor under legal working age and protection from unlawful abuse or harassment.

The company expects suppliers to conduct business in a way that protect and preserve the environment.

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The company is not listed on stock exchange. Unlisting enables flexibility to company to hide their unethical decisions and wrong practices. The company is accused of adopting unethical marketing practices such as offering product/services against the interest of society and targeting inappropriate audience like children.The contamination by high level of cadmium, lead and chromium found in effluent sludge of its bottling plant was much more in excess to acceptable standards.

UNETHICAL PRACTICES

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EXCESSIVE WATER USAGE

In India many states protested that coca- cola i uses three times as much water to produce a litre of coke. It has been reported that farmers are facing acute shortage of water causing crop failure. Activists alleged that states like Uttar Pradesh, Kerala, Rajasthan, Maharashtra are facing severe shortage of water around establishment of coke bottling plant.

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PESTICIDE CONTROVERSY (2003-2006)

According to CSE (Center for Science Environment) coca-coal contain toxins including lindane, DDT, Malathian, chloropyrophys etc. Pesticide can result into cancer and breaking down of immune system.About 57 samples were collected from 25 bottling plants from 12 different states and it was found that drinks were containing 24 times higher amount of pesticides that of allowed.

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DEFENSES CLAIMEDCoca-Cola angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world.Coca-Cola claimed that their soft drink is safe in every aspect and up to Indian standards.There are other food stuffs in market which contain much higher level of pesticide.In the end they managed to have “clean chit” from TERI (The Energy and Resource Institute).

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CONCLUSION

Every coin has two faces and results or conclusion can be drawn from both aspects. it very much depend on which side you choose to present your answer.

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POSITIVE ASPECTSProviding sufficient amount of taxes.Foreign investment (FDI).Employment opportunity.Consumer satisfaction.

NEGATIVE ASPECTSHealth issue.Pollution caused by its plants.Unnecessary use of water causing depletion of potable water.Unnecessary product.

Any question?

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