What business does Coca Cola have?

The Coca-Cola Company supports dictatorship and exploits workers in Swaziland, says the Danish NGO Africa Contact that has started an online protest. This makes me curious about Coke’s presence in Somalia. 

Coca-Cola has been in Africa since 1929 and is now present in all African countries. It is the continent’s largest employer with over 160 plant and nearly 70,000 employees. Its market share in Africa and the Middle East is 29 percent, which adds up to 9.1 billion liters of Coke a year. In comparison, Pepsi’s share is 15 percent.

However, Coke is accussed of supporting King Mswati III’s rule in Swaziland where it has its biggest operation. The multinational replies, it does not get involved with the politics of any country where it does business.

Nevertheless, democracy activists with Africa Contact, a Danish NGO working in Swaziland, urge the Danes to boycutt Coke. They claim that in addition to supporting the oppresive monarchy, Coke also exploit its sugar cane workers.

Recognition of Somaliland

In 2004, an $8.3 million Coca-Cola plant, United Bottling Company, opened in Mogadishu. Seven years later, Coca-Cola made a strategic relocation of the plant to Hargeisa, Somaliland. Supposedly, the Mogadishu franchise could not function, because of violence in the Somali capital.

Instead, Somaliland Beverage Industries owned by local businessman Ahmed Osman Guelleh was awarded a license to operate the franchise. It covers Somaliland and neighbouring semi-autonomous Puntland and boosts the economy in the two regions.

According to Financial Times, Ndema Rukandema, Coca-Cola’s franchise general manager for the Horn, Islands and Middle Africa, said that:

“Somaliland is a growing economy, made buoyant by the level of trading activity in the country. The stability that the country has enjoyed over the last several years is a positive indication of a conducive business environment.”

Coke leaves Mogadishu behind

When the Mogadishu bottling plant opened eight years ago, the 400-plus investors invited to finance the project were carefully chosen by clan. Each contributed a minimum of $300 to help start the company.

The project was a deliberate effort to create a feeling of communal ownership for the factory in a place where clan-based conflict has long been the rule. With the move from Mogadishu to Hargeisa, Coke seems to have lost faith in the Somali capital’s ability to maintain a profitable business environment.

Peter Kenworthy from Africa Contact says that:

“Coca-Cola is probably in Swaziland because it is a dictatorship that oppresses its unions and population. This allows wages to be kept low and unemployment high”

I wonder what business Coca-Cola has in Somalia and what business does a bottling plant have in a country that has scarce water resources.


Danish NGO Africa Contact

Financial Times

The Blog: Facts for working people

Bloomberg’s Businessweek

Youtube Video of the Mogadishu Plant