Coke’s AIDS Evasion

Coca-Cola has never been short on marketing campaigns. From Santa Claus commercials to the giant Coke bottle looming above Times Square, the corporation has done everything imaginable to convince consumers that Coke is a wholesome, friendly, downright American institution, the “good guys” of beverages. CEO Douglas Daft and his marketing team hoped to perpetuate this image in June 2001 when they began their campaign to become the poster-child corporation of UNAIDS by promising HIV/AIDS treatment to its employees in Africa. Coke declared, “Coca-Cola is completely committed to the future of the African continent, its economy, people, communities and health. We will do all that we can to enable Africans to reach their full potential.” Sixteen months later, Africa now has 28 million AIDS patients, and it is clear that Coke has no substantial commitment to its African workforce. As students of a university with close ties to Coke, we have a responsibility to take action.

On Oct. 17, members of the Harvard AIDS Coalition (HAC) joined hundreds of others from throughout the United States to protest Coke in New York City as part of the Global Day of Protest Against Coke. Similar protests throughout the world including the United States, South Africa, Thailand, Morocco and France. HAC also joined with the PSLM and HarvardWatch for a show of solidarity in front of Mass. Hall to urge University President Lawrence H. Summers to pressure Coke about its policies.

Coke’s policies are woefully inadequate for a corporation that claims to offer comprehensive treatment for its workers. Initially Coke only provided treatment for 1,200 of its 100,000 employees—less than two percent of its workforce. Only after intense pressure from activist groups did Coke announce on Sept. 29 that it would extend coverage to the eight largest of Coke’s forty bottlers in Africa. However, even this move forward came with small print undermining its significance. Hidden underneath all the positive publicity Coke hoped to gain from this announcement was the fact that Coke would only subsidize half the cost of such treatment, expecting its bottlers and workers to foot the rest of the bill. For smaller bottlers, such an option is unaffordable, especially considering Coke’s stated intention to phase out its subsidization over time. Even with recent expansion of its coverage, 56 percent of its bottling employees are without comprehensive coverage. If Coke is going to use AIDS as its latest marketing tool and promise to do all it can, it must provide full coverage to its entire workforce.

Don’t doubt for a second whether Coke has the resources to provide such coverage. Coke makes a remarkable 41 percent profit margin in Africa, more than double the 20 percent profit margin it reaps in North America. Of the $261 million Coke made in Africa in 2001 alone, $4 to 5 million (the estimated costs of full coverage for the entire workforce assuming negotiated prices of generic drugs) could easily be allocated for the treatment program, especially considering the $70 million Coke paid for Christina Aguilera’s endorsement.

Even worse is Coke’s scheme to keep the few workers it does cover from taking part in the treatment plan. Coke requires workers to make a 10 percent co-payment. Previous estimates put the cheapest annual treatment for one HIV positive patient at a cost of $2,500. For a Coke employee, many of whom make well under $3,000 a year, the cost is an impossible burden. Even the 10 percent co-payment is simply too expensive for Coke’s bottling employees to afford and will preclude treatment from actually reaching its workers. Coke must eliminate co-pays to make treatment available to anyone besides its upper-level employees in Africa.

What can Harvard do? Summers has significant leverage against Coke. Harvard owns more than 300,000 shares of Coca-Cola stock worth $15 million dollars and has an exclusivity agreement for beverage service on campus. Between these two relationships, Harvard can hit Coke where few activists can: in the pocketbook. Furthermore, Deval Patrick of the Board of Overseers is also an executive vice president and general counsel of Coca-Cola. As students we must use our voice within the university to pressure it to use its clout in the Coke corporation to enact change.

Why is Coke being held to a higher standard than the dozens of other corporations that do business in Africa? The truth is it is not. For all its rhetoric of being a caring company, Coke is offering far less treatment than other multinational corporations, when as the largest private employer in Africa it should be setting the bar. DeBeers now provides health coverage for life to its workers. Anglo (another mining company) has agreed to provide AIDS medication without cost to its workers for their period of employment.

Hopefully, Coke will recognize the minimal costs and long-term benefits of providing full coverage of treatment to its entire workforce and their families. If not, don’t let Santa Claus, digital polar bears or whoever Coke pulls out of the hat for this holiday season fool you into thinking Coke is a corporation with integrity and one worth supporting with your money. Instead, it may be time to experience the joy of Pepsi.

Rene H. Shen ’05 is an applied mathematics and economics concentration in Kirkland House. He is a member of the Harvard AIDS Coalition.