Things Get Pricier with Coke

It's hot and you are thirsty! Ah, but there's a vending machine with cans of Coca-Cola on display. You place the necessary coins in the machine and out rolls the can! Ummm, satisfying! But wait a minute! Late last night in the cool, cool of the evening you got a can of Coke from this same machine and it was much cheaper than the one you just purchased. How can that be possible, you ask?

It is possible because the folks at Coca-Cola believe, as its Chairman M. Douglas Ivester described to Veja, a Brazilian newsmagazine, in early October how desire for a cold drink can increase during a sports championship final held in the summer heat "so, it is fair that it should be more expensive. The machine will simply make this process automatic."

In the past year, Constance L. Hays in the New York Times reports, Coca-Cola has in fact begun quietly testing a vending machine, with nothing more than a temperature sensor and a computer chip, that can automatically raise prices for its drinks in hot weather.

"While the concept might seem unfair to a thirsty person, it essentially extends to another industry what has become the practice for airlines and other companies that sell products and services to consumers. The falling price of computer chips and the increasing ease of connecting to the Internet has made it practical for companies to pair daily and hourly fluctuations in demand with fluctuations in price -- even if the product is a can of soda that sells for just 75 cents," she notes.

With such innovations as adjusting prices based on demand at a specific machine, such machines appear to only be the first of many innovations by the nation's soft-drink manufacturers in an effort to exploit the highly profitable vending machine market, although a Pepsi spokesperson has indicated no similar thirst seeking machine is being tested at the No. 2 soft-drink company

"There are a number of initiatives under way in Japan, the United States and in other parts of the world where the technology in vending is rapidly improving, not only from a temperature-scanning capability but also to understand when a machine is out of stock," said Andrew Conway, a beverage analyst for Morgan Stanley.

Bill Hurley, a spokesman for the National Automatic Merchandising Association in Washington, added: "You are only limited by your creativity, since electronic components are becoming more and more versatile."

Boxed Wine: It's the Water!

"You cannot compete against the price of water," Barry Bedwell, president of the Allied Grape Growers, a 550-member California cooperative recently commented as a decreasing demand, coupled with new plantings, has seen prices for wine grape diminish by more than 50 percent this year.

Bedwell's lament comes as the the Bureau of Alcohol, Tobacco and Firearms (ATF) announced that it is reviewing the labeling standards for much of the $200-million-a-year boxed-wine category, as a loophole in the federal government's wine standards has allowed makers of boxed wines to add untold amounts of water to its products while still using classy varietal names such as Merlot and Cabernet Sauvignon on the labels. The practice has revived this stagnant segment of the wine business, which accounts for about 7 percent of all wine sales.

Art Libertucci, assistant director of the alcohol and tobacco division of the ATF, Melinda Fulmer reports in the Los Angeles Times, says his agency will also consider forcing certain brands to change their labels. However, Canandaigua Brands, which each year manufacturers some 30 million cases of boxed wine under the Almaden name, says it isn't giving up the category without a legal fight. The new formulas have not only been more popular with consumers, they can be less expensive to produce, claim executives from Canandaigua and E&J Gallo.

To consumers, the labels on these boxed wines are virtually indistinguishable from those on traditional table wines, using descriptions such as "Chardonnay with natural flavors." However, a large portion of the content of these formula popular boxed brands such as Almaden, Peter Vella, Carlo Rossi and Franzia can include water, sugar, fruit juice or a distilled grape alcohol in addition to actual wine.

Most consumers, however, don't know they're drinking something other than varietal wine, at least according to a survey commissioned by the ATF a year ago. "Our survey told us most consumers weren't making a distinction," Libertucci says. "We decided to see if we couldn't establish a special set of rules for these products so customers won't be confused."

Under the ATF's rules for traditional table wine, Fulmer's report points out, 75 percent of the product's volume must come from grapes of one variety. Under the specialty wine or "other than standard" category, which includes boxed wines, there is no minimum amount of wine they must contain. In order for the varietal name to be on the package, three-quarters of whatever amount of wine is in the product must contain grapes of one variety. So even if the beverage contains only ten percent wine, as long as 75 percent of that is Chardonnay, the label can say "Chardonnay."

The Wine Institute and the California Association of Winegrape Growers (CAWG), calling the labeling loophole a threat to California's wine-making reputation, are asking the ATF to remove the varietal designation from these products. "They are wearing a varietal [designation] that they didn't have to earn," Karen Ross, CAWG president told Fulmer.

French Chefs, Farmers Denounce 'McDomination'

Denouncing the inequality of the French restaurant tax code which is 20.6 percent for classic French restaurants but only 5.5 percent for fast-food and takeout establishments such as McDonald's, over 1000 Paris protesters, wearing white aprons and classic French tall white chefs hats, engaged riot police last month in a march to the nation's National Assembly lobbing eggs and assorted vegetables at the police which in turn was answered by tear gas.

One Brittany chef, coughing and crying as he escaped from the tear gas, the Washington Post's Charles Trueheart reported, spluttered: "See what their answer is? See how much they care about the little guys?"

Arguing that that the current tax policy not only subsidizes massive global food businesses and undermines the traditional French restaurateur, the protesting chefs point out that a reduction in the tax to 10% or 12% could create thousands of jobs in the hurting restaurant business.

McDonald's has become the focal point in recent months for the French and its farmers protesting what they term the "McDomination" by U.S. food companies. The champion of their cause has been José Bové, a 46-year-old union leader and sheep farmer from Larzac, an area of southwest France that is one of the country's best-known gastronomic regions.

Since his arrest in August on charges of vandalizing a nearby McDonald's building site, he has, according to a recent report by the New York Times' Suzanne Daley, become something of a national hero. Bové and his fellow French farmers are protesting what they see as the unfairness of the U.S. decision to impose high tariffs on Roquefort cheese, pate de foie gras and other luxury imported foods in retaliation for the European Union's decision to ban America's hormone-treated beef.

"There have been three totalitarian forces in our lifetime," said Bové, who supplies sheep milk to cheese makers. "The totalitarianism of Fascism, of Communism and now of capitalism. How can people try and tell us that we must import hormone-enhanced beef? What is that?"

But, as Daley writes, "some say that Bové's crusade has tapped into far larger issues gnawing at the French lately, including a general annoyance with the power of the American economy and a nostalgia for a way of life, including long lunches, that is disappearing yet still held in high regard."

Bové has been praised by France's highest officials, including President Jacques Chirac, who has declared that he, too, "detests McDonald's food." Prime Minister Lionel Jospin has compared Bové with other noted leaders who have emerged from grass-roots movements in recent years: "Here again is a strong, vigorous personality," Jospin said admiringly.

It was Bové, who heads a small farmers' union called the Confederation Paysanne, who organized the destruction of the McDonald's in nearby Millau -- using tractors to tear down half the roof -- and who was later put in jail five days, shocking both him and the French public.

While the Millau McDonald's recovered and is reported to be doing a brisk business, the community of Millau is awash in pro-Bové graffiti. "End McDomination" and "Free Bové" are scrawled throughout the area. Yet, every year, new McDonald's franchises are opening throughout France.

Bové claimed his moment of fame when he refused to be freed on bail, a stand that lasted only three weeks. He said his actions had been carefully planned and announced in the paper the day before. "There was nothing menacing about it," he said. "The children were there. There was singing. It had a festival atmosphere."

Bové told the Times' Daley that he favors a rhyming slogan that uses the French nickname for McDonald's: "McDo Dehors, Gardons le Roquefort" (McDonald's Get Out, Let's Keep the Roquefort). That is what he painted on the McDonald's construction site on Aug. 12.

While he stresses that he likes Americans, his contempt for American food habits is also obvious, reports Daley, as he offers statistics on the rate of obesity in America -- about three times that of the French -- and he also disdains Americans for eating all day long. He says America has no right to force its hormone-enhanced food down French throats.

Bové plans to bring his outrage at the luxury-food tariffs to Seattle this month, when the World Trade Organization, who authorized the U.S. tariffs, is expected to meet there and consider the issue again.

A.V. Krebs is director of the Corporate Agribusiness Research Project, P.O. Box 2201, Everett, Washington 98203-0201 e-mail:

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