Where does Olympic sponsor Coca-Cola stand with China?

Coca-Cola Co. has supported the Olympic Games for nearly a century. It counts China as its third largest market after the United States and Mexico. Coke’s challenges ahead of the Winter Games are in some ways representative of those of other Western sponsors, and in some ways distinct. Here’s a look at the company’s business dealings in China and its Olympic plans as the 2022 Winter Olympics are due to begin in Beijing this week.

Coke deepens ties with China

In 2019, Coca-Cola reached an agreement with China Mengniu Dairy Co. to share the designation of official soft drink sponsors of the Olympic Games through 2032. Chief Executive James Quincey hailed the marriage as a “deep partnership”. as he stood alongside Chinese society. The CEO at a press conference in Switzerland.The Beijing Games which start on Friday mark the first Olympiad in which joint sponsorship takes effect.The 12-year pact ties Coca-Cola to a Chinese company whose major shareholder is a public food giant. The deal cost the two companies more than $2 billion combined, including rights fees, marketing and other commitments, according to people familiar with the matter.

Coke previously held the Olympic sponsorship rights for soft drinks, juices, sports drinks and dairy drinks. In partnership with Mengniu (pronounced mung-neo), Coke has extended its reach to the entire dairy category, including ice cream and yogurt. The ability to share the cost of the sponsorship also motivated Coke to complete the deal, some people familiar with the matter said.

The tension is growing

The partnership comes at a time of escalating tensions between the United States and China. US officials, along with some lawmakers in other Western countries and some human rights activists, have said Beijing’s treatment of predominantly Muslim minorities in China’s Xinjiang region amounts to genocide. Beijing has dismissed criticism of its record and protested what it calls attempts to politicize the Games. He also punished companies that he said looked into the matter.

Coke’s business connections in Xinjiang

The Mengniu deal strengthened Coke’s ties with Cofco Corp., the state-owned food group that is the dairy company’s largest shareholder. Cofco has worked with Coke for decades to manufacture and distribute the beverage company’s products in northern China, including a bottling plant and sugar supplier in Xinjiang jointly operated by Cofco and Coke.

When the Mengniu deal was announced in June 2019, Coke was already under pressure from human rights groups asking about alleged abuses at its sugar processing operation in Xinjiang. The Transformer, a joint venture between Coke and Cofco, denied the allegations. Attention to China’s human rights record has grown in the run-up to the 2022 Beijing Olympics. So has criticism from Olympic sponsors.

What Coke Says

In a tense exchange at a July hearing of the U.S. Congressional Executive Committee on China, Rep. Tom Malinowski (D, NJ), pressed Coca-Cola’s global human rights chief, Paul Lalli, to condemn the internment of large numbers of people by the Chinese government. people in the camps.

Mr. Lalli refused to do so, replying more generally: “We respect all human rights and condemn any abuse. Our role as a sponsor is to integrate these fundamental principles into these sporting mega-events.”

Coke said independent audits of its operations in Xinjiang last year found no evidence of forced labor or other human rights abuses. China has denied using forced labor and describes its internment campaign in Xinjiang as part of an effort to combat religious extremism and terrorism.

Coke declines in the United States

The geopolitical environment prompted US companies such as Visa Inc. and Procter & Gamble Co. to lower their profile around the Games. Coke, like other sponsors, is virtually silent on the Olympics in the United States this year. Last year, as US officials called on Coke and other sponsors to encourage the International Olympic Committee to pull out of Beijing, Coke opted out of offering Olympics-themed displays to US stores. The decision was made because of the risk they could pose to Coke’s reputation, according to a person familiar with the matter. Gone, too, are the special-edition Olympic Coke cans, TV ads, and Times Square billboard celebrating an American athlete.

Coke is not sending its CEO or other senior company officials to Beijing, citing Covid-19 restrictions and the timing of its quarterly earnings report. He declined a request from the Wall Street Journal to make an executive available to discuss the Mengniu deal. Mengniu and the IOC also declined to comment.

Coke gets ahead in China

In China, Coke celebrates the Games through online and physical campaigns. He took out Coke cans bearing the Olympic Games logo and the Olympic rings, and saying “World Olympic Partner”. machine that offers gifts. Also in the capital, the company decorated some convenience stores with banners, offering shoppers Olympics-themed flyers and pins. On Chinese social media, she encourages people to collect her commemorative Olympic pins.

This story was published from a news agency feed with no text edits

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