Thursday, January 12, 2006

American capitalism bombs again

Here we have yet another example (like Blockbuster) of big U.S. businesses steamrolling the public into accepting what THEY want to sell, not what people actually want to buy.

For prologue, another example: I have a few very worn-out pairs of sweatpants with tags that say "Hanes, Her Way." When I went back to buy more, I discovered that Hanes now only makes sweatpants with pockets. That's not my way, I don't like the pockets. Too bad for me. I wonder who the "Her" is who is getting what she wants.

So what's with Coke? They decided to make "new Coke" and poured millions into marketing it. But people didn't want new Coke, they wanted old Coke, so then old Coke was reborn as "classic Coke." Here you have "Mexican Coke" which has a proven audience, and is legal - and Coke is trying to squelch its sale.

Extracts from
U.S. Thirst for Mexican Cola Poses Sticky Problem for Coke
Though It's the Real Thing, Soda's Route Across Border Breaks Company Rules
Investigating an 'Irritation'
by Chad Terhune for the Wall Street Journal, January 11, 2006

The middle shelf in the soft-drink aisle at Las Tarascas, a Latino supermarket in Lawrenceville, Ga., was bare last week. But store manager Erik Carvallo couldn't call the local Coca-Cola bottler to replenish his stock of Coke.

The Coke Mr. Carvallo's customers had snapped up comes in scuffed glass bottles stamped "Hecho en Mexico" -- made in Mexico. It found its way to this Atlanta suburb through an underground supply chain that flouts Coca-Cola Co.'s long-established distribution system.

Mexican-made Coke is such a popular taste of home for many immigrants that Las Tarascas sells about 20 cases a week, or nearly 500 12-ounce bottles at $1.25 apiece.

Coke from south of the border is a big business, fueled by the Hispanic population, the fastest growing minority group in the U.S., and soda connoisseurs drawn to its taste and the old-time look of the iconic bottle.

Fans insist the Mexican cola, made with cane sugar, has a better "mouth feel" than the U.S. formula. U.S. bottlers switched from cane sugar to high-fructose corn syrup in the 1980s to cut costs.

Mexican Coke is produced by 13 company-authorized bottlers, but Coke condemns its importation as the work of bootleggers. That's because the company has a network of individual bottlers throughout the world with their own exclusive territories.

The underground business is especially galling to Coke and its bottlers because Coca-Cola Classic sales in the U.S. are down 10% since 2000...

Mart Martin, a Coke spokesman, says the company has successfully filed lawsuits over Mexican Coke in the past, but he declined to elaborate. ... The company also has fined some of its Mexican bottlers for failing to keep their sodas out of the U.S.

"Coke is sending lawyers to harass people instead of catering to customer demand," said Danny Ginsburg [of] a Los Angeles company that sells hard-to-find drinks. He says he has stopped selling Mexican Coke.

Mr. Martin said the company doesn't consider its legal maneuvers to be harassment.

Coke has no plans to start making a version of Mexican Coke in the U.S., claiming consumers wouldn't consider it authentic. Introducing another Coke formulation also would undermine the myth that the famous soda is identical everywhere, even though the recipe varies slightly around the world. In Europe, Coke is made using sugar from beets.

Distributors and storeowners who cater to Mexican Coke cravings usually are reluctant to discuss how they get their supply. Jeff Guarino, who sells Mexican Coke and other glass-bottle sodas through Pop the Soda Shop, a Scottsdale, Ariz., company, said he has a "don't ask, don't tell" policy with his suppliers.

Mexico has the world's highest per-capita consumption of Coca-Cola ... Mexican Coke is still sold in the contour glass bottles Coke commissioned in 1916 to ensure that consumers weren't buying copycat drinks.

[One retailer] who moved to the U.S. from Mexico nearly 20 years ago used to order U.S.-made Coke from Atlanta-based Coca-Cola Enterprises Inc., the world's largest Coke bottler. He stopped after he discovered that he could get a better price from Sam's Club and other retailers.

CCE also wouldn't guarantee a specific delivery day and didn't respond to requests for another Coke cooler. "For a big company like Coke, they don't care about a small business like me," he said.

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At 9:31 AM, Blogger kenju said...

It's ME! I am the Hanes Her Way girl; I HATE pants without pockets.

At 10:10 AM, Blogger Mirty said...

Ah, I was going confess as well. Yes, I like sweat pants with pockets. Cannot live without pockets. (I'm a gadget girl.)

At 4:04 PM, Blogger Lizzie said...

It's funny, I was just thinking about this dilemma this morning: falling in love with a product but being fearful at the same time that the bastards are going to change it on you as soon as you do. It's come to light when I find a pair of shoes ("Should I buy two pairs, just in case?") or anything really, I guess. (I just worry more about shoes disappearing than I do anything else. There's a story there, I'm sure...)

Anyway, it's good to know that it's not just me. Or I don't think it is anyway...

At 12:30 AM, Blogger Shane said...

So much for free trade, globalization, fairness. I thought competion was good ... oh I forgot, only if it does not effect the opposition. Now greed comes into play.

At 8:05 AM, Blogger emaleejayne said...

"Coca-Cola Classic sales in the U.S. are down 10% since 2000..."

That was just before I moved to France...and yes, there IS a direct connection!

At 4:31 PM, Blogger bill said...

I haven't heard of "Mexican Coke," but here in Texas you can get "Dublin Dr Pepper," which is Dr Pepper made with cane sugar. It's legal. There is one small bottling company in Dublin Texas that makes it. And it really is much better than the regular Dr Pepper which is made with corn syrup


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