Final project unetical of soft drink company.........

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Padmashree Dr. D.Y. Patil University
Department of Business Management.
PROJECT TITLE :
UNETHICAL PRACTICES BY COCA COLA AND PEPSI
SUBMITED TO MR VISHAL SIR
SUBMITTED BY GROUP MEMBERS
NAME ROLL NO
KHAMLESH PANDEY 011161
ROHAN NAIK 011179
AJAY NANDKUMAR 011158
ROHAN YADAV 011172

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Coca-cola
The world is changing all around us. To continue to thrive as a business over the
next ten years and beyond, we must look ahead, understand the trends and
forces that will shape our business in the future and move swiftly to prepare for
what's to come. We must get ready for tomorrow today. That's what our 2020
Vision is all about. It creates a long-term destination for our business and
provides us with a "Roadmap" for winning together with our bottling partners.
Our Mission
Our Roadmap starts with our mission, which is enduring. It declares our
purposeas a company and serves as the standard against which we weigh our
actions and decisions.
 To refresh the world...
 To inspire moments of optimism and happiness...
 To create value and make a difference.
Our Vision
Our vision serves as the framework for our Roadmap and guides every aspectof
our business by describing what we need to accomplish in order to continue
achieving sustainable, qualitygrowth.
 People:Be a great place to work where people are inspired to be the best
they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
Partners: Nurture a winning network of customers and suppliers, together
we create mutual, enduring value.
 Planet: Be a responsible citizen that makes a difference by helping build
and supportsustainable communities.
 Profit: Maximize long-term return to shareowners while being mindful
of our overall responsibilities.
 Productivity: Be a highly effective, lean and fast-moving organization.

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Our Winning Culture
Our Winning Culture defines the attitudes and behaviors that will be required of
us to make our 2020 Vision a reality.
Live Our Values
Our values serve as a compass for our actions and describehow we behave in
the world.
 Leadership: The courage to shape a better future
 Collaboration:Leverage collective genius
 Integrity: Be real
 Accountability: If it is to be, it's up to me
 Passion:Committed in heart and mind
 Diversity: As inclusive as our brands
 Quality: What we do, we do well
Focus on the Market
 Focus on needs of our consumers, customers and franchise partners
 Get out into the market and listen, observe and learn
 Possessa world view
 Focus on execution in the marketplace every day
 Be insatiably curious
Work Smart
 Act with urgency
 Remain responsive to change
 Have the courage to change coursewhen needed
 Remain constructively discontent
 Work efficiently
Act like Owners
 Be accountable for our actions and inactions
 Steward system assets and focus on building value
 Reward our people for taking risks and finding better ways to solve
problems
 Learn from our outcomes -- what worked and what didn’t

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Be the Brand
 Inspire creativity, passion, optimism and fun
PEPSI
Our Mission and Vision
At PepsiCo, we believe being a responsible corporatecitizen is not only the
right thing to do, but the right thing to do for our business.
Our Mission
Our mission is to be the world's premier consumer products company focused
on convenient foods and beverages. We seek to producefinancial rewards to
investors even as we provide opportunities for growth and enrichment to our
employees, our business partners and the communities in which we operate.
And in everything we do, we strive for honesty, fairness and integrity.
Our Vision
PepsiCo's responsibility is to continually improve all aspects of the world in
which we operate – environmental, social, economic – creating a better
tomorrow than today.
Our vision is put into action through programmers and a focus on
environmental stewardship, activities to benefit society and a commitment to
build shareholder value by making PepsiCo a truly sustainable company.

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Coca-Cola Continues Unethical and Dishonest Practices in India
• The Indian governmentforced Coca-Cola out of the country in 1977.
• The company returned in 1993
• Each bottling plants extracts up to 1.5m litres of water everyday from the
ground.
• It takes nine liters of clean water to manufacture a litre of Coke.
• In 2000 Coca-Cola opened a plant at Plachimada, a village in Kerala to
produce1.2m litres of coke every day.
• The conditional licence granted by the local panchayat authorised the use
of motorised pumps
• But the company drilled more than six wells & illegally installed high-
powered electric pumps to extract millions of litres of pure water.
• The level of the water table fell from 45 to 150 metres below the surface.
• The conditional licence granted by the local panchayat authorised the use
of motorised pumps.

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Kala Dera - Thirsting from Coca-Cola
• Kala Dera is a large village outside the city of Jaipur.
• Agriculture is the primary source of livelihood.
• Coca-Colastarted its bottling operations in Kala Dera in 2004, and
within a year, the community started to notice a rapid decline in
groundwater levels
• Kala Dera is a large village outside the city of Jaipur.
• Agriculture is the primary source of livelihood.
• Coca-Colastarted its bottling operations in Kala Dera in 2004, and
within a year, the community started to notice a rapid decline in
groundwater levels.
• Kala Dera lies in an overexploited groundwater area and access to water
has been difficult.
• Summers are particularly intense in the area, when water shortages are
most acute.
• Moreover summer months are also when Coca-Cola reaches its peak
production.
• Coca-Cola bottling plant in Kala Dera continues extracts the most water,
making already existing water shortages even worse.

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• For farmers,lossof groundwatertranslateddirectlyintolossof income.
• For manychildrenitmeantleavingschools toprovide amuchneededhelpinghandin
household since the womenhadadditional burdens

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Community response
The community in Kala Dera organized itself to challenge the Coca-Cola
company for the worsening water conditions - through extraction and pollution -
and demanded the closure of the Coca-Colabottling plant.

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UNETHICAL PRACTICES BY COCA COLA AND
PEPSI
INTRODUCATION:
AUTHORIZATION:
This report is being submitted to DR. Muhammad Khalili, Professorof business
ethics, University of Wollongong in Dubai. The topic of the report is unethical
issues of cocacola in comparison with Pepsi.
Purpose of the Report:
In today’s competitive world, many organizations are practicing unethical
practices to increase their productivity and profit without caring for the
consequences of their actions.
In order to stay ahead of their competitors many organization overlook the
moral and ethical aspects of their actions and their main focus remains on
increasing profit and getting competitive advantage.
Furthermore, if when we consider our company cocacola, on the basis of its
involvement in unethical practices, cocacola has been involved in many
unethical practices like child labor and use of pesticides in their beverages over
the years. This report will evaluate the unethical practices by cocacola and will
suggest cocacola to improve their behavior as for as ethical practices are
concern.

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PREVIEW:
This report starts with the introduction of the chosen company (cocacola) and
then it goes to several unethical practices, the company is involved in. then the
company is compared with their arch rival and competitors Pepsi and then the
report is concluded with the conclusion and recommendations.
HISTORY OF COCA COLA:
Cocacola was established by john Pemberton. The story of cocacola is very
interesting. John Pemberton stimulated caramel colored liquid and took it to a
pharmacy and added carbonated water in it, and the sample was very
appreciated by the people who tasted it. After watching the responseof the
people the pharmacy put the drink on sale for five cents. They named the drink
as cocacola and they were able to sell only 9 glasses of cocacola per day in
early days of cocacola.(coca-cola.com,2010)
In 1891 a businessmen Griggs Candler bought cocacola rights for just $2300.
Candler was the first president of cocacola. Candler was a very successful
businessman due to his innovation and marketing skills. He knew that there was
a very good scopeforthe beverage industry in United States. He started
promoting cocacola by giving away free samples and advertising it in many
different ways. By 1895 Candler had built beverage plants in Chicago, Los
Angeles and Dallas. By that time sodadrinks got huge reputation in United
States. .(coca-cola.com,2010)
In 1899 Benjeman Thomas and Joseph whitehead bought rights from Candler to
Bottle and sell cocacola.
As the drink got reputation with the passage of time many new competitors
came in the market, basically copying the cocacola idea. Cocacola responded
this thread by introducing unique bottle shapes, just to differentiate their product

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from the competitors. Cocacola then went international by introducing its
productin Canada, France, Cuba, and some other countries.(coca-
cola.com,2010)
RobertWoodruff’s father bought Cocacola from Candler in 1919. Woodruffis
considered to be the main personbehind the success ofcocacola. He introduced
cocacola to the word by taking cocacola to the Amsterdam Olympics with the
US team. He introduced Six-pack and open top cooler, to make the drink
available to the customer in home or outside. This was a great innovation done
by Woodruff. This gave Cocacola a huge opening in the market and gave the
company a huge success. .(coca-cola.com,2010)
In 1941 when the United States entered into the World War, Woodruff
introduced announced that soldiers can buy cocacola for just 5 cents. Cocacola
was quite liked in those areas and when the war finished cocacola was already
established in those areas. CocaCola then got global; they had their plants all
around the world .(coca-cola.com,2010)
After a success storyof 70 years cocacola decided that it’s the time to diversify
their productand introduce something new. This led them to the introduction of
Fanta and Sprite.
In 1981 Robert Goizuta tookover as the chairman of Cocacola. He made the
Cocacola as a public company known as Cocacola enterprises Inc.
In 1990s cocacola saw a vast growth in the beverage industry. This era is
known as the emerging advertisement competition. Man other companies were
trying to take competitive advantage over their competitors by applying new
marketing strategies. Cocacola was no different from others. They lined up
with various players and teams to promote their products. Theyassociated with
football world cup, Olympics games, NBA, Rugby world cup and Nascar
competitions. They started the famous “Always cocacola “advertising

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promotion and the “cocacola polar bear” campaign. Many new markets like
Germany and India were found by cocacola. At the moment Cocacola has
more than 500 brands and is being love all around the world. They have brands
like Diet coke, thumps up, Minute maid, Sprite etc. they have many flavors like
lemon cola, green tea and orange cola etc..(coca-cola.com,2010)
Cocacola collected around 28 billion dollars in revenues and their profit was
around 6 billion in 2007. They spent 2.2 billion dollars on advertisement in
2007. They spent around 60 million dollars for recycling the plastic bottles in
United States. (corporation-free.org,2010)
UNETHICAL PRACTICES BY COCA COLA IN RELATION
WITH ETHICAL THEORIES:
Cocacola has been noticed to be involved in various unethical practices like:
1: Child labor
2: Water wastage
3: Unethical labor practices
4: Harmful ingredients
CHILD LABOR:
Sugar is the basic ingredient for making soft drinks. Coca cola is blamed of
buying sugar from sugar farms in Latin America who use child labors for
producing sugar. So indirectly coca cola is encouraging the child labor. They
illegally hire the children to manufacture the sugar. Children are mainly used

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for planting sugarcanes in very miserable conditions in Latin America. And
before cutting the sugarcane the leaves are burnt which cause tremendous
smoke, which affect the children health. (Human Rights Watch, 2004).
If we apply this act using ethical theory this act is against act utilitarianism
theory as a large number of children get effected by by child labor and harms
are more than the benefits. So it can be proved that the act of buying sugar from
Latin American fields is unethical.
3.1.1 WATER WASTAGE:
Coca cola is one of the world’s largest beverage manufacturers. Besides their
success in United States they have always been involved in growing their
business around the world. For this they have entered in many global markets
around the world. India is one of those countries, where every multinational
company sees a huge prospect due to their population and growing economy.
Cocacola entered in India market in early 1990’s.
India is coca cola’s top international investor. Coca cola has invested around
one billion dollars in India in previous years.
Residents of Kerala (south India) have been facing a tremendous shortage of
drinking water since 1998. When the matter got the attention of higher
authorities, an investigation was conducted and it was found out that the reason
behind the shortage of water was coca cola plant in Kerala. Coca cola was
accused of using around one million liters of water daily to operate. Local
people complained that plant since the plant arrived there was a shortage of
water and people stopped working in farms due to shortage of water. But on the
other hand coca cola explained their case by saying that they didn’t cause
shortage of water in the state, but the shortage is due to shortage of rain. And to
compensate the local people coca cola started providing drinking water in those
areas which were facing the shortage. (Biz/Ed, 2010).

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Coca cola has also been blamed for drawing clean drinking water from wells in
remote areas of Kerala. Local people suffered a lot from this as they were force
to bring drinking water from other areas.
The act of coca cola by drawing community water from the ground without the
permission of the local residents is unethical. If we see this from the prospect of
act Utilitarianism Theory, this behavior is clearly unethical. As more number of
people is suffering and only few people are getting benefits.
Unethical labor practices:
Coca cola is accused of being involved in awful labor practices in Colombia.
They are accused of being involved in violent activates against the labors. Coca
cola took the advantage of poverty in Colombia, as they knew that Colombia is
a poor country with most of its people living in miserable conditions without
any means of income, so they built their plant in Colombia for accessing cheap
labor. ( killercoke.org,2004)
International labor rights and united steel workers filed a case against coca cola
in a court in Miami asking for 500 million dollars as compensation. They
accused coca cola for killing some major union leaders for their benefits. But
this allegation could not be proved in the court and the case was discharged.
(Martinez, 2006).
This act of coca cola by being involved in horrible activates like killing and
abusing the employees is wrong as it clearly defy the theories of ethics.
Harmful ingredients:
Coca cola is a kind of brand, which always tries to focus on its quality and
customer care in their marketing crusades, but the reality is that coca cola has
been accused for using highly toxic and harmful chemicals in their beverages in

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recent years, with caring about the health and safety of their potential
customers.
Centre of science and environment believes that coca cola uses such kind of
ventilated water in their manufacturing process that contains very harmful
pollutants and chemicals that can be the main reasons for cancer and break
down of the immune system. Furthermore CSE reveals that coca cola products
uses more amount of chemicals then the suitable level, which are highly
harmful and are against the regulation of European Union.(Tejomoortula, 2006).
While on the other hand coca cola refused to accept any of the allegations and
said that they filter the water and they make sure that they use appropriate
amount of chemical in their beverages which is not harmful for human health
and safety. And coca cola announced that the lab test conducted by CSE is not
dependable to monitor the level of chemical in beverages.(Tejomoortula, 2006).
As competition is increasing day by day, everybody looks like that he is
competing in a race; they are ready to go to any extreme to win that race. They
won’t care about other people and the Ethical norms set by the society. Same is
the case with CocaCola.
In order to increase their profit and productivity they tried to risk many human
lives by using such harmful chemical in their ingredients, which is wrong and
unethical.
COCA COLA AND PEPSI:
Pepsi cola was established by CaledBradham in 1898 in North California. In
1902 he properly announced his company known as Pepsi-cola Company. Then
Pepsi started to get attention of people of California and Bradham saw some
prospect in this business so he started Pepsi in bottles. And with the passage of

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time business got bigger and bigger and they registered the patent for Pepsi-cola
in 1903. In 1903 the company sold 7968 gallons of Pepsi. Pepsi is believed to
be the first company in the United States to use a motor vehicle instead of
horse-drawn vehicle. And in 1907 Pepsi went international by introducing its
drink in Mexico. And in 1909 Pepsi signed racing driver Barney Oldfield as
their brand ambassador and went into a marketing race with other competitors
like coca cola. And in 1932 Pepsi increased its international market by
introducing the drink in Argentina and then in Russia in 1938. Pepsi is
considered to be the first company to use a jingle for their advertisement in
1940. (sirpepsi.com, 2010)
At the moment Pepsi is one of the world’s largest soft drinks company which is
all over the world and has got a huge number of customers. They spent millions
of dollars on research and marketing their product. According to an estimate
Pepsi collected a revenue of 14.80 billion dollars by 2010, . And at the moment
Pepsihave brands like Pepsimax, Pepsione, diet Pepsi, Pepsicherry etc.
Now if we compare coca cola with Pepsi on the basis of ethical practices
performed, Pepsi is no different than coca cola. Pepsi also have been involved
in many unethical practices over the years. As mentioned above that coca cola
uses 30 percent of harmful chemicals in their drinks and on the other hand Pepsi
uses more amount of harmful chemical in their drinks than Coca Cola. These
chemical are very harmful for human health and when it was proved in the lab,
both Pepsi and coca cola rejected the labs report telling them that those reports
are unreliable.
As coca cola, Pepsi is also accused of affecting the local inhabitant and the local
population in India. Like coca cola Pepsi is also blamed for drawing and
wasting community water for their bottle plant in Kerala, severely affecting the
local population. (Narayanan, 2007)

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as a result, it can be said that both Pepsi and coca cola have been involved in
unethical practices which is affecting the people.
Conclusion and recommendations:
Coca cola has been involved in many unethical activities like drawing the
community water, without the permission of local population, therefore causing
many difficulties for the local population.
Coca cola is also blamed for using child labor for their operation. They use the
child labor for getting sugar in very miserable conditions which is against the
theories of ethics. Coca cola also tries to benefit from the poverty of people and
their employees in Colombia work in very miserable condition and they are also
accused of killing some union leaders. This is against moral rights and is
considered unethical.
Coca cola is also blamed or using unhygienic and harmful chemicals in their
drinks which is very harmful for the health of the people and is very unethical.
And if we compare Pepsi with coca cola, pepsi is also involved in unethical
practices. Pepsi has also been involved in many unethical practices like drawing
the community water without the permission and wasting it, causing sever
difficulty for local population. Pepsi is also accused of using harmful
ingredients like chemicals in their drinks, which is affecting the health of their
customers.
We can recommend coca cola to consider their policies and practices and have
some mercy for the people they are affecting by their unethical practices. They
should not draw water illegally and above all they should not waste it , as it
belongs to the local population and is affecting their lives. Coca Cola should
also make sure that they don’t buy sugar from those farms which use child labor
in their farms as coca cola is indirectly promoting child labor which is unethical.

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They should also consider their ingredients. They should not play with the lives
and the health of their customers by including harmful chemical. They should
also consider their labor policies in countries Colombia. They should not take
advantage of their poverty and they should give those labors their proper rights.

Final project unetical of soft drink company.........

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