MNC Case Study- Coca Cola

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Specific area- Rajasthan in India

  • Coke has 52 water intensive bottling plants in India, creating loads of new jobs
  • Raw material for making Coke- water- which is free to access in India so they make profit
  • On average, a bottling plant uses 0.5million litres of water a day.
  • This water is extracted from aquifiers in drought prone areas and in parts of Rajasthan the water table has fallen over 20 metres. 
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specific area- Rajasthan in India continued

  • Farmers are without water for their crops and so have to abandon their land- which leads to poverty. 
  • Bottling plants pass on bio-solid waste to use as fertiliser, however when this waste was tested in contained high levels of calcium and lead which is toxic
  • Social and political conflicts have arisen over Coca Cola in India. In 2004, one plant was forced to shut down after violent demonstrations.
  • Coca Cola denies that there is anything wrong- theres a quote on their website that says "Local communities welcomed us"
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International Context

  • Coca Cola headquaters in an MEDC- Atlanta in USA
  • Research and development for syrup concentrates happen here
  • Bottling, canning and carbonation is done in LEDC'S where labour and water is cheaper
  • In most cases, Coca Cola dont actually own the bottling plants, they just subcontract them from smaller companies around the world
  • Therefore if any conflict (environmental, economical, social or political) arises, they cant pull out without loss of investment in buildings etc
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International Context continued

  • Location of the plants is controlled by access to fresh underground water supplies
  • Coca Cola also takes advantage of tax environmental laws- which means that they can dispose of their waste cheaply
  • It employs PR companies to deflect attention from negative media coverage 
  • Their annual marketing budget is $2 million
  • In May 2003, they were fined $300,000 for polluting a major river in Panama. 
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