Government
The Illogic of Muhtar Kent
Last week, the CEO of Coca Cola, Muhtar Kent, wrote an article in the Wall Street Journal responding to the news that public health advocates in some states are calling for heavy taxes on high calorie food and beverages. In his piece, titled “Coke didn’t make America fat,” Kent unsurprisingly objects to the tax, arguing that it is regressive in nature, has inherent illogic and suffers from a lack of common sense thinking. Kent makes the argument that the real problem is lack of physical activity and that a tax can’t change behavior.
This piece reminded me of a slogan for a campaign that was launched in Israel a few years ago in an attempt to prevent car accidents and careless driving: “when driving – be smart, not right.” The idea was that even when other drivers upset or endanger you, you shouldn’t try to fight back, educate or punish them; just be smart and try to get away safely. I’m not sure everyone understood that call, especially those who it was supposed to target, but still, the campaign was powerful.
I think that here, in the junction between being right and being smart, Kent took the wrong turn. Personally, I totally agree with his take on this issue. The idea of creating a tax on sodas and other foods deemed unhealthy is really an admission of failure to deal with the root of the problem. (Another Israeli idiom for unhelpful solutions is “putting plaster on a deep wound.”) Those who want sugar or fat will still buy it, if not in a soda or a chocolate bar, then in any other cheap product that isn’t taxed. Instead of singling out particular products like sodas, why not suggest a tax on every product that contains more than 5% fat or a certain amount of sugar? Because this isn’t realistic. I agree with Kent that the tax doesn’t make sense and is very unlikely to change behavior. The most that might happen is a shift in consumer preferences from one set of sugary products to another.
Nevertheless, I think the damage created by writing this piece outweighs any potential benefits. One of the things I’m grateful to my parents for teaching me is not always to respond. They used to say&38212;and it took me years to understand them—that sometimes it is more powerful not to say anything or to react than to fight back.
For years now, Coca Cola has been investing huge efforts in cultivating the image of a sustainable and socially responsible company. It invests a lot of money not only in sustainable and socially oriented activities themselves, but also in telling the public about them. And that is a good strategy. It is easier for customers to relate to a company they perceive as having values, and numerous surveys in recent years have shown that this pays off in terms of loyalty. Kent will of course object to the idea of the tax because it will hurt his revenues. So while his arguments may be absolutely right, his opinion will always be associated with his financial interests and not with social or any other kind of justice. It therefore doesn’t feel right that he is the one to make this case, and in doing so, he harms the image the company is working so hard to promote. The fight against the tax should have been left in the hands of the lobbyists, where it rightly belongs.
Galia Shilo Sum is an Israeli editor and reporter currently living in the US. At her last job she was a part of the launching team of Calcalist, a new daily business newspaper where she worked as the newsroom manager and the editor of a Corporate Social Responsibiliy section that she launched. As a volunteer, she has also led writing and journalist workshops for young women who are sexually attacked.
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COMMENTS
BY li qiu
ON November 3, 2009 09:16 PM
agree! great points
BY Karthik
ON November 4, 2009 04:47 AM
Galia,
Great article. You have presented some interesting arguments. I agree that from the point of view of building the corporate social responsibility (CSR) image of coke, whatever Kent did does seem inappropriate. But I beg to disagree on your contention that “coke is not responsible for making America fat” and that it is ultimately the consumers who are making the choice, and if you impose restrictions on coke, then the consumers will rather shift to similar products than consuming coke”
In my opinion, the crime of coke is not selling unhealthy products. There are umpteen unhealthy on the market. But the crime of coke is overselling their unhealthy products - overselling by way of excessive advertisements, creating lifestyle statements, “cool” image of a coke drinker etc, and this kind of comprehensive attack on an average consumer, and on gullible teenagers, creates a kind of extreme social pressure, leading oneself to believe that If you don’t consume coke and other similar products, then you are lacking something. A coke is more than a coke. Its image has been enmeshed into a perceived desired personality of a modern youth. And the coke people drill this very image over and over and over again with all their might, on a gullible American population. Even when I know that coke is unhealthy, I consume coke because I don’t want to be left behind. I want to be socially secure, and ward off the social pressure [especially this behavior is seen among teenage kids] so much so that I don’t exercise rationality anymore. Probably, if too many people aren’t holding a coke can in a party, I wouldn’t hold it either. I would be contented with a glass of water.
Coke may not the cause of an obese America but I feel that coke consumption can be very strongly correlated to unhealthy America.