Ethics and Sustainability in Coca Cola Company: Effects on Local Communities and Consumers in Australia

This report is about Coca Cola Company. It focuses on explaining some of the effects of the company on the environment and the surrounding communities of Australia. In this report, I have focused on two main stakeholders which are the consumers and the local communities of Australia. The report highlights the problems experienced by the company such as water shortage, toxic waste distribution, pollution and pesticides distribution. The report also discusses recommendations on how to minimize the unethical practices of the company on the people of Australia.

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Introduction
This report is about Coca Cola Company. It focuses on explaining some of the effects of the
company on the environment and the surrounding communities of Australia. In this report, I
have focused on two main stakeholders which are the consumers and the local communities
of Australia (Rao, 2012). These are the major stakeholders affected by the operations of the
company. Some of the problems experienced include the following: water shortage, toxic
waste distribution, pollution and pesticides distribution (Yu, 2012). The pesticide regulation
and its effects have been highlighted. Several recommendations have been discussed on how
to minimize the unethical practices of the company on the people of Australia.
Background
Coca-Cola Company was invented in the late 1800s by Pemberton in Georgia U.S. It is the
largest company of soft drinks with over one million bottles per day (Petty, 2012). Some of
its products include Fanta, Sprite, and Coca-Cola. It is the most recognized brand in the entire
world. It manages its operations in all the continents of the world. It reaches over 200
countries in the world.
Coca Cola has invested a lot in the Australian market and it is one of its largest investors in
the country’s economic sector. Several people have been employed by this company. This
company has had to face some challenges such as water shortages, population and toxic
waste distribution (Barkay, 2013). This has led to confrontations with the government and the
non-governmental organizations. It also, led to the closure of some factories in Australia.
Effect on Stakeholders
In this context, stakeholders are the people, groups of people or institutions that are directly
or indirectly affected by the operations of the company (Biedenweg, 2013). Here in Australia,
the stakeholders of the coca cola company include the consumers, local communities,
employees, shareholders, suppliers and the government. In my study, I have only highlighted
how this company affects the local communities and the consumers in Australia.
Effect on the Local communities
Just from a point of view, most of the factories owned by Coca cola need a lot of water since
this is a beverage company (Górriz, 2001). Most of the people in need of water have been
disadvantaged due to the water shortages. For instance, out of , 2.8 liters of water, the factory
uses only 1 liter of it is produced as the finished drink. This shows that the company
definitely consumes a lot of water.
Toxic wastes have become a menace in the cities of Australia. This is because of the dumping
of soda bottles from the factories. This has led to pollution of the environment especially soil
and air pollution. Many non-governmental organizations have confronted coca cola over this
issue but it has declined to take the responsibility (Krishna, 2011). They do not at all show
any commitments towards solving the problems. Though Coca cola has hosted many events
in Australia, this shows that their operations are unethical and should be corrected. Therefore,
I recommend that the company takes charge of the situation and try to sort it out.

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Effect on the consumers
Since the day the organizations started addressing the problems Coca Cola Company was
causing, there has been a drastic decrease in their sales volume (Babakus, 2004). Though
there are these challenges, the company there is still some consumers who would rather still
to this brand because of its reputation. The company has a good marketing strategy that can
easily hide this information and win over the loyalty of consumers. From my research, some
people have pointed out that the products of Coca cola contain some chemicals which may be
harmful to people (Chen, 2012). For instance, in 1999, 100 school children in Belgian had
been poisoned after taking drinks. This led to protests all over the world. People started
declaring that all Coca Cola products should be banned.
Additionally, consumers have adoption of inappropriate social norms. The Coca Cola
company in Australia imported ideas used by other countries and which derailed the social
norms of the consumers. They organize events such as music concerts that derail the morals
of our youth. There are some critics who have organized campaigns claiming that the
company has a negative effect on people.
Major situations
The Non- governmental organizations in Australia, were able to highlight some of the
problems due to the bottling operations of the Coca. Some of these challenges have been
mentioned before (Kum-Lung, 2009). Water shortage was the major challenge this company
experienced. Some of the factories in the different cities were accused of water draining, land
pollution, and air pollution. Samples of soil near the factories indicated that there was the
presence of lead in the waste sludge which the company claimed to be artificial fertilizers.
Presence of Lead in the waste sludge makes the soil very toxic and leads to health problems
(Petty, 2012). A report from the CSE also indicated that the products from Coca Cola
contained pesticides. It was found that out of 12 brands of Coca Cola, three were found to
have 36 times of pesticide residue.
These situations made the government ban most of the Coke products. This led to a drastic
decrease in the sales volume of the company. It was hard for the manager of the Coca Cola
Company in Australia to gain customer loyalty (Rao, 2012). The reputation of the company
had been seriously tarnished. When compared to the U.S, corporate social responsibility
reputation was not a success.
Legislation
These are the laws imposed by the government. (Rao, 2012) In the processing industries,
these are the standard rules of safety that any company dealing with drinks should adhere to.
Pesticide regulation
During the crisis, the manager started asking the people in charge of the CSE reports
questions. He started inquiring what methodology they used to test the products and so many

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things (Barkay, 2013). This shows that this manager did not adhere to the laws set by the
government. The pesticide regulation showed some of the flaws in the company and how the
products were not good to the people. The test showed that these products could not meet the
standards set by the government and had to be prohibited (Krishna, 2011). The government
should reduce their rules and not impose huge product restrictions.
Recommendations
At first, when the company was launched in Australia, the main goal was to achieve
maximum profits and this has always been the case (Chen, 2012). As per now, the company
is moving to become an ethical brand in the entire world. The effects of the company on the
environment, consumers and local communities indicate unethical business practices are very
high (Babakus, 2004). Thus, there is the need for the company to improve its corporate
social responsibility so as to earn loyalty and trust of the people.
The following are some of the key things that I would recommend the company should do:
 The company should fully collaborate with the government in ensuring that center for
science and environment is properly done.
 The company should create and maintain a more sustainable and social environment.
 The company should increase its interaction with the stakeholders especially the
communities around it so that it can improve ethical branding (Rao, 2012).
Conclusion
Coca Cola is among the most recognized and successful soda brands in the world. Several
ethical problems have come up due to the negative impacts of company's operations on
the environment. People feel that the activities of the company are polluting the
environment and leading to waste dumping. This has ruined the corporate reputation of
the company. The company has a low ethical branding, and the manager’s information on
the company’s activities is not honest. The manager at one time disrespects the CSE
saying their results are not validated. It is always clear that ethical branding enhances the
reputation of a firm as at the product and corporate levels. In our context, ethical branding
of the company is low and thus the reputation of the company is bad.

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