A Coca-Cola plant in Mexico uses 1.08M liters of water per day as wells dry up
truth-out.org
truth-out.org
So the government gave Coke the permits, Coke used under 80% of the agreed amount, and now it's a crisis? It has the markings of some severe utilities planning blunder.
> "The city has been growing significantly since the 1970s," he says in an interview at his office, which has a view of Huitepec mountain, where Coca-Cola extracts its water. "But in San Cristobal, there was no urban planning. And that's been aggravated by public policies that don't pay attention to the Indigenous people of the state."
That sort of gets at the real problem.
There are a lot of questions. Would things would actually get better if Coke were to shut down operations? How many people would stop drawing salaries? How much tax revenue loss does the government face with halted operations? Would the freed up water volume be enough to avert disaster? Does the drought affect everyday citizens or farmers the most? Are there any other environmental externalities that result from the Coke plant?
These are some of the tough questions that we need to answer before we can readily assign blame to megacorps. It's easy to hate large companies, and I dislike my fair share, but boiling this situation down into a headliner shaming corporate avarice may not be the best way to make progress. Maybe they should shut down the plant, or maybe they shouldn't--I don't know, and it shouldn't be for armchair economists thousands of miles away to decide. It just seems more complicated than the solicited visceral emotions may suggest.
I was there last spring, and my guide said Coca-Cola bribed the village curanderos (spiritual healers) to increase the consumption of Coke, so they incorporated it into religious rituals [0].
The water isn't safe to drink, and Coke can be cheaper than milk or formula, so many moms feed their babies Coke instead [1].
The point is, when the megacorp has subverted democracy from the national leaders [1] to the regional leaders all the way down to the village healers, how can you not hold the megacorp accountable?
[0] https://costumbresporelmundo.files.wordpress.com/2014/05/tum...
[1] http://robinewing.com/2013/09/22/cola-consumption-and-the-ch...
If you want to hold somebody accountable start with the guys peddling phony healing for dollars then move up from there to whoever is politically in charge of that region letting it go to shit, not hiring engineers and planners but instead cronies, and pocketing the rest of the federal money transfers. https://growthlab.cid.harvard.edu/publications/why-chiapas-p...
Investigators use the concept of cui bono to figure out who is ultimately responsible.
Who benefits?
Just because local distributors are doing the bribing doesn't insulate the megacorp from moral culpability for their actions.
By the way, the bribes often aren't in cash, they're free cases of Coke.
Lets say Chiapas (3.4 million people) has (10% population of Spiritual Healers) = 340,000 Spiritual Leaders.
Each spiritual leader will now purchase a 1 Liter coke for a religious ceremony EVERY DAY that they otherwise would not have. Coke costs .73 pesos per liter in Chiapas. 340,000 x .73 Pesos = 248,200 Pesos per day.
248,200 Pesos coverts to $13,992.88 USD per day.
$13,992.88 x 365 (days in a year) = $5,107,401.20 USD Total extra coke consumption.
So Coke is now possibly selling 5 million USD more dollars per year of coke with this scheme. You must subtract the cost of making coke which we do not know, and the cost of the "bribes", to find Coke's total profit here.
But as someone involved in marketing the potential downside of this scandal doesn't seem worth the extra 5 million in sales from Coke used during religious rituals in Chiapas.
It seems more likely to me that if mothers are feeding their babies Coke instead of the expensive milk, or contaminated water, that the Spiritual Healers are making the same decision as everyone else. That Coke is the safest, most cost effective and pleasant drink available.
Full Disclosure: I am drinking my morning Diet Dr. Pepper as I type this.
Now it's medicine. Now it's essential for life itself.
So you drink it at breakfast to fortify you for the day ahead. You feed gallons of it to your kids because you love them and want them to be healthy.
The high level process is: Create need (subvert the healers' credibility), make the product indispensable (attach to healing ritual), link to outcome and provide a sample (feeling better = Coke)
Most infamously, Nestle used techniques like this to sell powdered baby formula in third world countries -- a practice that literally killed thousands of children in the process. In the United States, Coke is co-branded with lots of other things that people like: McDonald's, Movies, Christmas (Santa = Coke), etc. Coke is the master of applying this marketing pattern.
But does that type of strategy extend to local communities and Spiritual Healers?
I don't think the math supports that. The team of "expert consultants" who would come up with a plan like this and institute it would charge more in their salaries than the increased consumption in Chiapas is worth. Also, ask yourself why a strategy like that would even be necessary in Chiapas???
You don't need to trick people into buying Coke when they don't have access to clean and affordable water.
So Coca Cola FEMSA's marketing people develop and execute their marketing strategy. Just because Mexico is a relatively poorer country doesn't mean that the business people are a bunch of bumpkins.
People in Chiapas may not be drinking Coke by the gallon, but it's a product with drug-like margins. They have a positive customer value, or Coke wouldn't be doing it.
What scandal? Envelopes full of cash at night by a local manager and be done. Both sides will deny it.
$5 Mil in sales is nothing, but $5 mil here and $5 mil there...Surely Coca Cola want everyone consuming their products.
So, the unsafe water, gets treated, margin added and still cheaper as coke than local drinkable water.
Not sure what to say at this.
The main ingredient in Coca-Cola is filtered water. If Coke is cheaper than water in these communities, then why isn't the company selling bottled water for the same price? Their bottling and distribution costs would be the same, while the cost of ingredients would decrease.
It makes no economic sense for Coca-Cola to not sell bottled water in this context. Lacking an economic motive, what's left? Is the assertion that Coca-Cola is actively malevolent and is using their economic power to harm people on purpose at their own expense?
If Coca-Cola is selling bottled water, then another company could come in and start selling bottled water as well, and there's really nothing interesting to differentiate them. But while another company can sell soda, they can't sell Coke. So getting people used to Coke means they'll always instinctively reach for Coke when they're thirsty.
But if something changes the water shortage, either environmental or technological, then Coca-Cola is still in a good position.
Fucking hell that's awful.
She told me when they first brought him home (he was 5), that he could barely speak, was terrified and kept screaming "oda!".
They thought perhaps Oda was the name of his brother who was sold into slavery by his birth mother.
He was unrelenting in his crys. Finally, exhausted, my cousins husband sat down at 3am and opened a Coke to drink. The boy pointed and screamed "oda!".
He wanted Soda. They gave him some and his entire nervous system relaxed and he could goto sleep.
He was raised in a drug house, spent most of his life locked in a closet with little food and plenty of feces.. and his mother bottle fed him soda.
When they adopted him he was like a feral animal, hiding and picking food out of the trash.
He's now 9 and doing much better (they had to ween him off soda). He's relaxed and is in a loving and safe home.
But fuck sakes, I don't think most of us have any idea the horror that many people are facing on a daily basis.
> We in the developed world enjoy a dream-like existence few in the whole of human history have ever known.
You just have to ask yourself; how many of my ancestors were able to afford a hot shower in the morning and you begin to realize, how mind-fuckingly amazing the life we have actually is.
Thanks for putting it into words.
That's a big reason why breastmilk companies are ready, willing and eager to "help" with sample product. Hell, somehow two of those companies were able to estimate the birthdate that our child would have likely had if my wife hadn't miscarried early. They go to the expense of mailing 10 lb boxes of product with a retail value of around $75 to people -- it's almost an "addictive" product with ROI high enough to justify that large marketing expense.
In third world countries, they go so far as to send people dressed like nurses to provide samples and "help".
I'm male, but I'm a parent and remember dealing with this stuff.
In addition to difficulty getting the baby to latch after feeding formula very early, there's also the issue of building and maintaining supply. The first few days of life are important for both mother and baby - there isn't a lot of milk being produced at first, and the child's attempts at nursing encourage milk production to begin in earnest. The natural course is that the mother's milk comes in to meet the baby's growing need. If you "skip" a day or two in the beginning, even if you get the kid to latch there isn't going to be enough milk to satisfy them. This leads to supplementing with formula, which in turn solidifies difficulty latching and further delays milk production.
I remember having to be very firm with hospital staff to under no circumstances feed our first daughter formula. In the first couple of days they really pushed us to, justifying it by saying "Momma needs her rest!" and "Dad should experience feeding the baby, too." We had a good experience overall with both our children, but in both cases I had to really take command of the situation to ensure that our wishes were followed. In a couple of cases that was even "against medical advice".
There is a lot of noise around breast feeding on the Internet but if you've got references to something other than apocryphal about formula preventing breast feeding I'm sure my daughters would like to know about it.
If your wife and daughters breastfed in the hospital or immediately thereafter and then supplemented, that is different (and lower ROI) scenario.
There’s a ton of published material on the topic.
I find your reasons hard to believe and your reference #1 proves nothing. If water is not contaminated chemically, boiling is the solution like millions of people do daily. I also find it hard to believe milk is more expensive than coke as UHT milk is easy to import in large quantities and cheap.(A fast check shows milk is half the price in Mexico, water is even cheaper). Perhaps people do it anyway, but reasons sound dubious to me.
[1] If the water is unsafe to drink, why would they not just boil it? That's how the vast majority of the world makes their water potable (especially tea).
I'm not saying Coca-Cola is free from wrongdoing, but the evidence of malice is very apocryphal. In my experiences in the third world, Coca-Cola was the only soft drink available, and people genuinely seemed to just really like soft drinks.
Heck, we have trouble getting Americans to drink water over soft drinks.
"many moms feed their babies Coke instead"
I see one reference in the article cited about two women feeding Coke to their babies. I'm not sure how the "many moms" conclusion is drawn - is there data on this or just this one anecdote?
That's the real problem in a lot of these situations and really with any long term obligation or resource grant bestowed by a government to a private entity. It doesn't necessarily reflect the will of the people in the future or, in many cases particularly in the third world, the present.
Short of restricting the maximum duration for such a grant, I don't see many ways to avoid this situation. Even that may have negative consequences as a company wouldn't want to invest in a municipality if the resources it'll be leveraging may not be available in the future. The uncertainty may make it a non starter.
Qui bono?
Never attribute to stupidity that which is adequately explained by corruption. Or something like that. In situations like these (international megacorp and their offspring making deals in countries with 'emerging markets') I tend to take a very cynical view. I'm pretty sure that whoever signed those deals doesn't have to rely on these wells.
You raise some good points, though.
The government being at fault doesn't change the problem. It's a small city in rural Mexico- you can't expect much. Calling it a "severe utilities planning blunder" implies absolute agency by the local government, which just isn't always true. The government sold a local resource with the expectation that it would be safe and that may have been foolish but we can't tell from the outside in this case. Take examples of Polynesian islands being strip-converted into farmland as the inhabitants sell to corporations. The natives were one step above tribal, and had no idea that would collapse the local ecosystem, and they're now forced to import all their food. It destroyed their health and economy- that wasn't a "severe utilities planning blunder", they were directly taken advantage of.
It's pretty clear that Coca-Cola is deeply entwined with Mexican governance at all levels, so it probably doesn't even make sense to blame the government. Coke may very well be making all the choices, when former presidents of coke become presidents of the country.
> There are a lot of questions. Would things would actually get better if Coke were to shut down operations? How many people would stop drawing salaries? How much tax revenue loss does the government face with halted operations?
Those are mostly strawmen- the choice isn't binary. A Pigovian tax maximizes value to everyone. A good question is whether that would be sufficient, but I get the impression from the article that most people think it would. Since that region is the biggest water source in Mexico you'd think they have at least a little extra water.
Do you think the government acting for the people made the agreement or a government official(s) accepted bribes to make it happen. Hmmmmmmm....
No - it's how these permits are allocated -- and who pulls the strings on those making these "decisions" -- that's the crisis.
Oh of course through wealth redistribution policies. At least until that well runs dry also.
/s
To the point of this though. One of the worlds largest breweries is situated in my city. My country has a horrendous alcohol problem, to the extent where paying farm labourers in booze only got outlawed just over 20 years ago.
Anyway this brewery makes most of the beer in the Southern Hemisphere, yet it was able to get so large because it is right on top of one of the biggest springs, and they claimed riparian rights many years ago.
My problem being is that up until this year, for the past 3 years, the public was allowed access to the spring on their land. Now they are denying the public access while we go through a drought and they continue to produce beer for next to nothing as they don't pay a cent for their biggest ingredient. Now I want to stop them making beer while we are in a drought, but in a country run by alcohol makers that will surely either be an impossible task or end up getting me killed.
The factory was in the Palakkad district of Kerala which has historically low levels of ground water. The company was extracting more water than agreed to. The politics behind approving this plant in an already water deprived area is another story. The villagers were experiencing health problems, water depletion in their wells.
I would say the politicians approved this plant and the people shut it down. Even there was a smear campaign in the state against Coke depicting it as an effective insecticide so that people would stop consuming it.
This is not an isolated incident of foreign companies exploiting a third world country. I do not understand what companies means when they say "responsibly sourced". People need jobs and salaries, but not at the cost of their own environment & health.
http://www.righttowater.info/rights-in-practice/legal-approa...
I blame Coca-Cola and their ilk for the obesity epidemic, but water shortages are more caused by farming and climate change than they are by breweries or bottling plants.
How long does it take for that water to re-enter the ecosystem in a usable way? Water isn't just destroyed, yeah?
Water planning is definitely worthwhile, but seems there are a few other variables in play.
It depends on where you got the water from. If you got it from a river or lake, probably "until the next time it rains". If you got it from an aquifer, then it depends on how long it takes water to filter down into the aquifer, assuming it can do so at all.
> Water isn't just destroyed, yeah?
In the case of aquifers it actually can be, effectively. Per https://en.wikipedia.org/wiki/Aquifer#Human_dependence_on_gr... second paragraph:
Fresh-water aquifers, especially those with limited recharge by
snow or rain, also known as meteoric water, can be over-exploited
and depending on the local hydrogeology, may draw in non-potable
water or saltwater intrusion from hydraulically connected aquifers
or surface water bodies. This can be a serious problem, especially
in coastal areas and other areas where aquifer pumping is excessive.
In some areas, the ground water can become contaminated by arsenic
and other mineral poisons.
All of which is to say that in some places (and in particular in much of the Western US) water may closer to a non-renewable resource than a renewable one if it comes from an aquifer. At least on years-to-decades timescales.
What does this really mean though? In New England we have Walnut trees growing everywhere, and no one is watering them. If anything they're locking water into the soil that would otherwise just evaporate.
But most almonds and pistachios are grown in a desert, with water extracted from ground-water aquifers. Without the wells, the almonds would not grow.
Problems start when people grow walnuts in places that average 10" a year....
Also, those trees aren't locking water anywhere. They are probably releasing the same amount per tree to evaporation.
If you care about protecting our managed pollinators, giving up almonds is a good first step. I have also switched to peanuts.
The tricky part is ownership. Who owns groundwater? Who owns rainwater?
As a general rule, it's best to get your macronutrients from sustainable sources. In other words, eat peanuts instead of almonds, and eat olives instead of palm or coconut oil (unless you have allergies or other health issue preventing that). Avoid the high-labor, resource-intensive fad foods.
1. We need food, we don't need soda. So food will always get a priority for resources, thus its heavy water usage more excusable. Farming uses a lot of water, its just a given, and we need farming to survive. Raising beef actually is much more wasteful than almonds, for example. Almost all farming requires large amounts of water.
2. Rural irrigation is a bit different than urban irrigation. They may draw on their own springs and wells or impact less people with water restrictions due to low density rural populations. Plants in or near urban areas can impact millions of people. Worse, urban areas need to be kept clean or hygeine goes out the window then come the superbugs, epidemics, etc. If we ration urban water too strongly in favor of soft drinks, then that means less showering, baths, street cleaning, etc which isn't good for society.
According to https://en.wikipedia.org/wiki/Hydraulic_conductivity water moves through porous material at rates varying from 300 m/day (mixture of gravel and sand) to 3 mm/day (clay, sandstone).
EDIT: arithmetic.
He was sick of multinationals like Coke buying water for a couple of cents a mega-liter. Coke would then add some sugar and color to it before selling it back to the people for dollars per liter. The expensive purification of that water was paid for by tax revenue.
Chávez decided this was not right, and put an extremely heavy tax on multi-nationals buying "resources" from Venezuela and doing that.
Personally, I think the world would be a better place if that was the law everywhere.
On a related note, Juneau, the capital of Alkasa needs a new water purification plant, theirs is running beyond capacity. The proposal was to increase tax so everyone pays for it. It came to light Holland-America (cruise line) buys millions of gallons for a tiny, tiny fraction of the price that locals pay. When it was suggested to Holland-America they should pay a little more to help fund the new purification plant, Holland-America simply threatened to stop bringing cruise ships to Juneau. So now the residents pay more tax so that Holland-America can continue to buy millions of gallons for much cheaper than the locals pay!
The problem with third-world countries is not that the political elite fails to identify problems, it is that they use this to gain more power through populism or they use it to gain more money through corruption.
In third world countries, populism is often triggered by promising people finances from government coffers.
That is why you see populism in Brazil, Venezuela, etc cause the government to overexpand, grow corrupt, and eventually start to implode. First world countries have self sufficient people who would prefer more freedoms, third world countries have people who rely on the government to meet their basic needs.
I disagree. Voting for the guy who will bring in job subsidies, factory subsidies, farm subsidies, government investment in rural areas, government contracts, federal projects, etc to your area is absolutely finances from the government coffers and one of, if not the largest, campaign issue during the 2016 US presidential race.
>third world countries have people who rely on the government to meet their basic needs.
Most of rural America, nearly 50m people, would collapse overnight if not for farm subsidies, factory job creation tax credits, and all manner of welfare. Even with all these things the rural poverty rate is almost 20%. Poor parts of urban America are almost as bad.
I think you're dismissing how poor much of America is and how much these people depend on the government to survive.
That said, they probably could have called Holland America's bluff. But I'm sure they had good cause for not wanting to take that risk.
You know these cities existed long, long before cruise ships, right?
Also there are plenty of them (Haines comes to mind) actively fighting to keep cruise ships OUT. It ain't all sunshine and roses.
Citgo happens to employ former Trump campaign advisors as lobbyists.
http://thehill.com/policy/energy-environment/348007-trump-ex...
But this is what I heard from an analyst and we must consider some information loss because this is far from my core expertise.
Well, they were protecting environmental travesties before and after; the only difference was that he got a greater cut.
Guess who owns the vast majority of shops there!......
Yup! Holland-America!
(Friends tried to open a jewellery shop in Skagway, AK and didn't want to pay the kick-backs Holland-America demanded.... so Holland-America just warns people on the ships not to shop there .. "We heard someone got ripped off.. " etc. Out of business in less than one season!)
Holland-America are not officially printing brochures or anything like that.. they're a just using word of mouth.
If it ever went to court, I am certain they could just say "yeah, we heard it was true..."
Also, this is misleading:
> FEMSA reports that it uses 56.9 billion liters of water a year in its operations across Latin America. In Mexico, the company holds 40 water permits.
The 56.9 billon liters seams to be a lot and it is a lot, but it's the total in Latin America. But this number is not related to the problem in Chiapas. How much water does the plant in Chiapas use?
"The Chiapas branch of Conagua confirmed to Truthout that the company has permits for two wells to extract a total of 499,918 cubic meters of water per year, or 499.9 million liters. In 2016, the company extracted 78.8 percent of the permitted total."
(Conagua is the National Water Comission)
> The plant consumed over 1.08 million liters of water per day in 2016.
What ever amount of water Coca-cola is taking it is surely a drop in the bucket compared to other uses of water. More likely it is a problem of water being contaminated for other causes. Chiapas is in the middle of the rainforest. They get 120 inches of rainfall a year. In any case their problem is that they get too much rain.
Agriculture is one of the biggest uses of water. The average US irrigated farm uses 1.6 [0] acre-feet of water per acre of land. Since 1.08 million liters is ~0.9 acre-feet of water. Coca-Cola is using 319.6 acre-feet of water a year which is equivalent water usage, in average, to an 178 acre farm. This is a very modest farm.
This wasn't Coca-Cola we were talking about, but a small 178 acre family farm. This discussion wouldn't be happening.
If you want to complain about Coca-Cola, fine. Perhaps attack it business practices or its contribution to obesity, but it is disingenuous to attack its use of water, when the amount of water used is a very small fraction of farm and industrial uses of water.
[0] - https://ageconomists.com/2015/04/20/acres-and-acre-feet-a-lo...
Certainly their contribution to obesity is major reason to complain about Coca-Cola.
[1] http://www.alternet.org/story/142645/after_6-year_battle%2C_...
Why didn't they just make it part of the contract?
https://youtu.be/GmOZL-jNH-s?t=124 (english subs)
I will probably head over there next week with provisions, as there is no government help at all.
https://www.theguardian.com/environment/2014/jun/18/indian-o...
everywhere!
"Surely the earthquake damaged underground caves in the aquifer, which could impact aquifer recharge in the future,"
You could give them the benefit of the doubt on a translation error, but no mainstream paper would be this sloppy.
I'm not very fond of the Mexican government, and believe me, if companies approach them they will be willing to sell even the air we breathe. But we have to put our part to stop empowering this multi-nationals to do as they please.
By the way, this is why corporate-written and corrupt treaties such as TPP and TTIP can be so dangerous if they end-up preventing national governments from putting such restrictions against multi-national companies.
Another thought: expect more of this to happen when corporations start being run by AI - a lot more. A corporation is already an inhuman entity that's highly biased towards "increasing profits at all costs" without regard for much else. An AI-run corporation would be a supercharged version of that.
People who also "can't wait to be governed by their AI overlords" should take the same thing into consideration.
My question, is there any way to estimate the ground water? Why did the build there, or is the rate of extraction is really high?
edit: apparently over there they get some 3000mm a year rain!!
A market system is the objectively the best mechanism for allocating scarce resources.
(Of course, if you object to a pure market system, the government can regulate the market and subsidize residential tap water.)
Why isn't water priced accordingly?
Water is not scarce! We got plenty. The model of water being a limited resource we have to save does not represent an economic reality.
We have an entire planet worth of water and we are not shooting it out to space. We know how to use it, how to clean it, etc. We will never run out of water. We might run out of 'free' water, but thats the whole point of using a resource, consuming it.
Particularly in the case of aquifer depletion, it's a very real issue. There may well be a large reserve of potable water available, but once it's used it may take hundreds, thousands, or millions of years to naturally replenish. Aquifers are often not a renewable resource on human timescales.
Are you OK with your family dying of thirst if you can't pay for water?
If the price of water is artificially set below market value, then demand is higher and supply is lower than it would otherwise be. If it costs $3 / gallon to transport water to where I live, and the government sets the price of water at $2 / gallon, guess what? No one transports water to where I live. Without that intervention, water might cost $4 / gallon, but at least it's available.
The facadian distance between Pespsi and Cocola water molecules is about 10nm which makes Pepsi efficient in terms of water requirements.
If only Coke fans got that right, maybe one day...