LEAKED: Coca-Cola's global sugar tax warfare

Cape Town - The Coca-Cola Company is sitting tight after alleged leaked emails exposed the corporate giant's worldwide war against sugar taxes on cold drinks, which is also on the cards for South Africa.

Hactivist site DC Leaks recently revealed Coca-Cola’s strategy to tackle public health policies at the local, state, national and international levels. These include trying to influence reporters, keeping a close watch on social media influencers and lobbying government.

The internal emails lay bare exchanges between Coca-Cola vice-president Michael Goltzman and Capricia Marshall, who is apparently working as a communications consultant for both Coca-Cola and the campaign of US Democratic presidential candidate Hillary Clinton.

Although there appears to be no mention of South Africa in the email chains, countries like Israel, France, the UK, Poland and Bosnia are named.

A proposed 20% tax on sugar-sweetened beverages could result in South Africa losing 60 000 jobs in the beverage industry, Coca-Cola Beverages Africa chairperson Phil Gutsche warned. The Beverage Association of SA (Bevsa) added the tax has the potential to slash the industry’s contribution to South Africa’s gross domestic product by R14bn.

Fin24 reached out to Coca-Cola, who was unable to confirm or deny if the mails are authentic; however, the global leader in the beverage industry was clear on its stance about "discriminatory taxes".

“The Coca-Cola Company works with governments and civil society around the world on calorie reduction initiatives that we believe are more effective than discriminatory taxes," head of communications for Coca-Cola Southern and East Africa Zipporah Maubane told Fin24.

She explained that more effective solutions to curbing growing obesity rates could be implemented, such as:

- removing all full-calorie beverages from schools;
- not advertising to children under 12;
- partnering with stakeholders to reduce calories from food and beverages;
- providing beverages in smaller packaging; and
- reformulating products to help consumers reduce and manage added-sugar consumption.

"We are listening and learning from leading experts in the public health community on our journey to becoming a more helpful and credible partner in this effort,” said Maubane.

Brand communications specialist Solly Moeng told Fin24 the alleged leaked emails put Coca-Cola in crisis mode. "If handled badly, the leaked emails will harm the image of Coca-Cola further," he cautioned.

"The company will either have to distance itself from the emails and deem them private conversations between two officials, conversations that do not represent company policy, or condemn them downright and transparently sanction the authors of these emails," Moeng explained.

"It must also show what it has done or intends to do, to genuinely work with health authorities for the benefit of the public/consumers of its products."

The Clintons and Coca-Cola link

The email chain brings to light the close ties between the Clintons and Coca-Cola, which is believed to have poured millions of dollars into the the Clinton Foundation. Critics have since raised concerns that Coca-Cola is able to sway Hillary Clinton's views on sugar taxes.

When Clinton indicated in April that she was "very supportive" of a soda tax in Philadelphia, Coca-Cola executive Clyde Tuggle took up his disappointment with Marshall. "Really??? After all we’ve done?" he wrote. "I hope this has been falsely reported."

Responding to this, Katherine Rumbaugh, vice-president of government relations for Coca-Cola North America, wrote that Clinton's campaign leadership team was caught unawares by her comments about the beverage tax. She also outlined the actions to be taken. 

A study published in October in the American Journal of Preventive Medicine found that Coca-Cola, together with Pepsi, sponsored a total of 95 US health organisations, including many medical and public health institutions whose specific missions include fighting the obesity epidemic. During the study period of 2011 and 2015, the two companies also lobbied against 29 public health bills intended to reduce soda consumption or improve nutrition.

"These companies lobbied against public health intervention in 97% of cases, calling into question a sincere commitment to improving the public’s health. By accepting funding from these companies, health organisations are inadvertently participating in their marketing plans," the study concluded.

However, outside the US Coca-Cola has also set its sights on the World Health Organisation (WHO), which just last month urged for global action to curtail consumption and the health impact of sugary drinks.  

According to a WHO report entitled Fiscal policies for Diet and Prevention of Noncommunicable Diseases (NCDs), fiscal policies that lead to an increase of at least a 20% in the retail price of sugary drinks would result in a proportional reduction in the consumption of these products.

The leaked emails also give insight into how Coca-Cola and the International Food & Beverage Association planned to “stay ahead of the curve” relating to a WHO report to end childhood obesity. According to the report, this could be achieved through taxes on sugar-sweetened beverages.

Ahead of the 69th World Health Assembly that ran from May 23-28, Wouter Vermeulen from Coca Cola Europe wrote: "It is clear that this Report will give Member States additional inspiration for interventions to address childhood obesity. Through the Coca-Cola system’s actions at country level we should try to stay ahead of the curve, demonstrating how we can help reduce added sugar intake from children."

A case study to remember

Moeng said the hacked emails make for a compelling case study.  

"It’s most interesting because there is no indication, in the leaked emails, that Coca-Cola ever discusses, even internally, the need to propose solutions to honestly curb obesity and other health risks emanating from high sugar consumption in their soft drinks," he said.

"They seem concerned only about finding ways to fight against or undermine government efforts to protect consumers. Their attitude is therefore driven by profit and hunger for market expansion alone. This will not win them friends; not in health authorities nor in the general public."

Moeng said consumers addicted to Coca-Cola products are unlikely to stop their drinking habits as a result of the leaked correspondence.

"People who are already addicted to Coca-Cola products will find it hard to either switch to alternative products with less sugar or to stop completely. In any case, addicts are unlikely to stop as a result of these leaks alone."

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