business news in context, analysis with attitude

The last days of 2005 weren’t particularly positive ones in terms of news coverage of the Coca-Cola Co.

For one thing, the Los Angeles Times had the following headline (picked up by a lot of other news outlets around the country: “Coca-Cola Is Going Just a Bit Flat in Atlanta.” The story detailed that while Coke and the city of Atlanta have been intertwined since the soft drink was invented there in 1886, the connection has become less heralded as other companies have grown in the city and Coke’s market capitalization was eclipsed by Pepsi’s. At the same time, Pepsi has “snuck in the back door,” being served in many restaurants and sold by virtually every retailer there.

At the same time, it was widely reported that the University of Michigan has suspended the sale of Coca-Cola products in vending machines, residence halls, and cafeterias on its three campuses. The decision was made after a campus group, Students Organizing for Labor and Economic Equality, accused the company of draining local groundwater in India and conspiring with paramilitary groups in Colombia to harass and harm union members.

The company has denied the charges, but reportedly was unable to meet the December 31 deadline to provide information to a university investigation.
KC's View:
It never rains. It pours.

We suspect that 2006 will see some turnaround for Coke, but it has to know that this kind of bad news feeds on itself.