Coke and ALEC — a Parting of the Ways

broken Coca-Cola vending machine

The Centers for Disease Control took a look at “fruit drinks, sodas, energy drinks, sports drinks, and sweetened bottled waters,” and officially declared that sugared beverages are linked with weight gain, up to and including morbid obesity. The Center for Science in the Public Interest calls these bottled sugar bombs “liquid candy” that provide only empty calories and are unnecessary in the human diet.

The American Legislative Exchange Council, or ALEC, is a group that writes “model bills” for the benefit of corporations, and then gets them passed by state legislatures. Rather than influencing federal law, the object is to run things ALEC’s way, state by state. ALEC is, for instance, adamantly against a tax on soda, calling it discriminatory. Most of ALEC’s doings take place behind closed doors, making decisions the public won’t find out about until it’s too late. Coke’s involvement with this arrangement was characterized by Rebekah Wilce for PRWatch.org. In 2011:

Coca-Cola Refreshments’ Director of Public Affairs and Communications, Gene Rackley, represents Coke on ALEC’s “Private Enterprise” Board…. ALEC policy benefits Coke and other sweet drink makers directly…. When ALEC and its deep-pocketed corporate members like Coke cry “discrimination” and claim to support “hardworking Americans,” consumers should take a closer look at Coke’s legislative and marketing agenda.

Consumers did take a closer look, but not primarily over the soda tax issue. Civil rights groups, concerned about voter identification laws, the encouragement of deadly force used by both police and citizens, and similar matters, encouraged Coca-Cola and other corporations to let their ALEC memberships lapse, and in 2012 some did, including Coke.

The reason the company gave for the breakup was that it had joined only to influence questions directly connected with its business — like soda taxes — and didn’t even attend meetings about any other issues. Will we know if Coke joins back up again? Not from ALEC, which doesn’t reveal its membership list — not even to Time magazine.

Can investors be a force for good?

What are these corporations so afraid of? At the very least, unhealthful products are becoming more expensive to promote and sell, and when a corporation has to spend more money, its shareholders get less. “Follow the money” is a tried and true formula that still holds. Forbes writer Adam Hartung spells it out:

It could become a requirement that Coke and Big Macs have warning labels educating consumers about the possibility of long-term illness from consumption. And product sales could only be limited only to people over 18 — eliminating corner Coke machines, killing products like Happy Meals and making “play place” stores obsolete.

Hartung reminds investors what happened with alcohol, when Americans started getting tired of alcohol-related vehicle accidents. The definition of drunk driving became more stringent, and the penalties for it became more punitive. “Public policies took direct aim at product consumption,” Hartung writes. This is exactly what the beverage industry does not want to see happen with sweetened drinks.

The writer suggests that it can be prevented if Big Food acts less like Big Tobacco and instead follows the example of Big Alcohol by stepping up to the plate and taking some responsibility. As usual, Coke and McDonalds are cited as the primary examples of corporate misbehavior.

Neither company promotes responsible consumption levels, nor does anything to discuss the importance of limiting use of their products. To the contrary, both like to promote larger package sizes and greater consumption — often beyond what almost anyone would consider healthy. Neither works aggressively to improve the quality of healthy products, nor showcases them as preferred products for customers to purchase.

It almost seems as if Hartung is trying to convince investors in these companies to do more about seizing the reins and creating a culture of responsibility. If that is correct, good for him!

Your responses and feedback are welcome!

Source: “ALEC and Coca-Cola: A ‘Classic’ Collaboration,” PRWatch.org, 10/12/11
Source: “Why Are McDonald’s, Coca-Cola, and Intuit Fleeing ALEC?” Businessweek.com, 04/13/12
Source: “Coke and McDonald’s Fell Off the Trend Bandwagon, Investors Beware!” Forbes.com, 07/26/13
Image by SliceofNYC

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