TCS Daily

What's in a Name?

By Duane D. Freese - April 21, 2004 12:00 AM

What's in a brand name?

Most corporations believe that its intrinsic value is as a name people can trust for quality and reliability. That's, after all, what attracted customers to a brand in the first place, and why else would they keep coming back for more?

But that same value also makes it an inviting target.

As former General Motors Chairman Roger Smith discovered with filmmaker Michael Moore in 1980 and Nike discovered with attacks on its "sweatshops" in the early 1990s, there is no better way to grab headlines for whatever purpose than by dragging a company's good name through the mud.

Lately, Coca-cola has become the target of some particularly virulent attacks upon its brand name.

The company has a long history of not only contributing to the communities in which its products are sold but relying on local suppliers and bottlers for its services. Coke's bottling operations are local businesses, not Coke owned. In fact, it's slogan for operations is "think global, act local."

But the fact that the enterprise amounts to a confederation of local businesses that return most of their profit to their communities provides no protection against attacks on Coke's name as if it were a monolith.

Shareholders at its annual meeting Wednesday face placards proclaiming, "Killer Coke." The charge has nothing to do with its ingredients but with the murder of union leaders and members in Colombia by paramilitary forces there, allegedly with Coke's either forbearance or complicity. The attacks on Coke are being led by leaders of the union, Sintrainal, with which Coke's bottlers are negotiating contracts. And the protesters are calling for a worldwide boycott of Coke until it changes its ways.

A normal person certainly might ask: Are the claims true? Does Coke condone or support paramilitary attacks that have murdered its employees? The company vehemently denies the claims. But, you don't have to take its executives word for it. There is a lot of common sense reasons as well as a lot of evidence to dispute the claims of the StopKillerCoke campaign.

Not only have two government investigations in Colombia found no connection between Coke or its Colombian bottlers and the murders of the eight employees, most of them in the mid 1990s, a U.S. court also dismissed Coke as a defendant in a lawsuit brought three years ago in Florida on behalf of the anti-Coke campaign. And the International Union of Food Workers has come out against the proposed boycott saying that the charges lack substance.

So, if the charges are insubstantial and the case so weak, why is Coke under such severe attack?

Because it's successful. As Gary Hufbauer, a senior fellow at the Institute for International Economics put it simply, "Coca-Cola is an American symbol. That makes them a ready target."

Indeed, the StopKillerCoke Campaign puts the reason for a boycott of Coke in mostly ideological terms: "The struggle against capitalist globalization is a struggle against the policies of the transnational corporation. ... We should seek out the campaigns against Danone, Shell, Nike, Nestle, Coca-cola, and especially the Palestinian campaign against American and Israeli transnational corporations."

In short, Coke is an American icon, and that, as Hufbauer points out, "is something they can't do anything about."

But the media needs to do more about it. When someone accuses someone of so vile an act of complicity in murder, they need to demand evidence. And if it isn't forthcoming, they need to dig deeper into the motives and ideologies of the activists who are attempting to cash in on a company's brand name. The accusations can cause real harm, and not just to the companies.

As the IUF points out, "The boycott call is based on unsubstantiated allegations and empty political slogans. This call for a boycott will damage, rather than strengthen, the credibility of all those seeking to secure union rights for all employees in the Coca-Cola system."

Ethan B. Kapstein, a business and political science professor in France, noted in Foreign Affairs in 2001 that the need for adolescents to find work to live didn't end when Nike stopped hiring anyone younger than 18 at its overseas plants in response to protests it was engaged in child labor. In the case of young women, the alternative employment was the oldest profession of all - prostitution.

"By focusing attention only on those matters that tug at the heartstrings," Kapstein wrote, the activists have "left aside those matters that may be even more critical to global economic development, such as the role of multinational firms in technology transfer and human-capital formation."

The late Massachusetts Democratic Sen. Paul Tsongas noted the great contradiction in the anti-corporate movement: "You cannot redistribute wealth you never created. You can't be pro-jobs and anti-business at the same time. You cannot love employees and hate employers."

What's in a brand name? Trust for customers and a target for activist, yes. But let's not forget that for those working under it, it's also the name on the paycheck. Drag it in the dirt, and they'll be left in the dust.


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