The Coca-Cola Company has been a supporter of the Olympics for almost a century. It considers China as its third largest market after the US and Mexico. Coke’s challenges in winter sports are in some ways representative of those of other Western sponsors, and in some ways different. Here’s a look at the company’s business deals in China and its Olympic plans as the 2022 Winter Olympics begin in Beijing this week.
Coke deepens China ties
In 2019 Coca-Cola entered into an agreement with China Mengniu Dairy Company to share the designation of official non-alcoholic beverage sponsors of the Olympic Games until 2032. Chief executive James Quincy hailed the marriage as a “profound partnership” because of his standing with the Chinese company. CEO at a press conference in Switzerland. The Beijing Games, which begin on Friday, are the first Olympiad in which joint sponsorship takes effect. The 12-year agreement links Coca-Cola to a Chinese business whose largest shareholder is a state-owned food company. The deal cost the two companies a combined more than $2 billion, including rights fees, marketing and other commitments, according to people familiar with the matter.
Coke previously held Olympic sponsorship rights to soft drinks, juices, sports drinks and potable dairy products. In partnership with Mengniu (pronounced mung-neo), Coke expanded its reach into the entire dairy category, including ice cream and yogurt. The opportunity to share the cost of the sponsorship was also a motivation for Coke to strike a deal, some people familiar with the matter said.
increased stress
This partnership is flourishing at a time of rising tensions between the US and China. US officials, along with some lawmakers from other Western countries and some human rights activists, have said Beijing’s treatment of the mostly Muslim minority in China’s Xinjiang region is genocide. Beijing has rejected criticism of its record and opposed attempts to politicize the Games. It has also penalized companies that determine the issue.
Coke business dealings in Xinjiang
The Manganu deal strengthened Coke’s ties with Kofco Corp., the state-owned food conglomerate that is the dairy company’s largest shareholder. Kofco has worked with Coke for decades to manufacture and distribute the beverage company’s products in northern China, including a bottling plant in Xinjiang and Chinese suppliers jointly operated by Kofco and Coke.
When the Mengniu deal was announced in June 2019, Coke was already under pressure from human rights groups asking questions about alleged abuse in its Xinjiang sugar-processing operation. The processor—a joint venture between Coke and Kofco—denies the allegations. China’s human rights record increased attention as the 2022 Beijing Olympics drew closer. So criticized the Olympic sponsors.
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In a tense exchange at the July hearing of the US Congressional-Executive Commission on China, Representative Tom Malinowski (D, NJ) called on Coca-Cola’s global head of human rights, Paul Lallie, to condemn the Chinese government’s massive detentions. pressed for. of people in camps.
Mr. Lalli refused to do so, and generally replied: “We respect all human rights and condemn any abuse. Our role as a sponsor is to follow these basic principles for these mega-sporting events.” to be included in.”
Koke said an independent audit of its operations in Xinjiang last year found no evidence of forced labor or other human rights abuses. China denies using forced labor and has portrayed its detention campaign in Xinjiang as an attempt to fight religious extremism and terrorism.
Coke pulls back in America
The geopolitical environment has prompted American companies such as Visa Inc. and Procter & Gamble Company to lower their profile around the Games. Coke, like other sponsors, is silent on this year’s Olympics in the US. Last year, as US officials called on Coke and other sponsors to encourage the International Olympic Committee to pull out of Beijing, Coke opted not to offer Olympic-themed displays to US stores. According to a person familiar with the matter, the decision was made because of the risk they pose to Coke’s reputation. Cans of special-edition Olympic Coke, TV commercials and a Times Square billboard celebrating an American athlete have also disappeared.
Coke is not sending its CEO or other top company executives to Beijing, citing COVID-19 restrictions and the timing of its quarterly earnings report. It declined the Wall Street Journal’s request to provide an executive with Mengniu to discuss the deal. Mengniu and the IOC also declined to comment.
Coke forge ahead in China
In China, Coke is celebrating the games through some online and brick-and-mortar campaigns. It has issued cans of coke that bear the Olympic Games logo and Olympic ring, and say “Olympic Global Partner.” A red minibus with Coca-Cola and the Beijing Olympic logo is seen at a pop-up event in Beijing, alongside a vending machine. The machine that gives gifts. In addition, in the capital, the company has decorated some convenience stores with banners offering shoppers Olympic-themed folders and pins. On Chinese social media, it is encouraging people to collect their commemorative Olympic pins.
This story has been published without modification to the text from a wire agency feed
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