Coca-Cola's Dirty Little War in Brazil

Says Laerte Codonho, president of Dolly Soda, a Coke competitor
in Brazil: "All I can say is that Coca-Cola itself said that there is no
competition in Mexico because they assassinated the competitors,
killed them, eliminated them physically. And these are the
same people who control Coca-Cola in São Paulo."

Anamárcia Vainsencher

Since August of last year, Brazilian manufacturer Dolly Soda has made various accusations against the Coca-Cola Company. The president of Dolly Soda, Laerte Codonho, told a reporter of Brasil de Fato how Coke has hired a lobby group to control various sectors of the Brazilian government to act in its favor, and revealed detailed documents of Coke's plans to eliminate Dolly from the market.

The accusations began when Rede TV! aired a video tape of Coke's ex-director of strategic acquisitions, Luiz Eduardo Capistrano do Amaral, divulging how he planned to eliminate Dolly Soda at the orders of Coke's headquarters in Atlanta, Georgia, USA.

Events in the Brazilian Congress have strengthened Codonho's accusations. During Congress' ordinary session, December 3, 2003, the request presented by house member Celso Russomano to ask for a public audience with Coca-Cola and the Defense of the Consumer, Environment and Minorities of the Federal House was taken off the voting agenda in the absence of Russomano.

House Deputy Givaldo Carimbão, president of the Commission, confirmed the version sent out by Russomano's press secretary, who said that house member Arnaldo Faria de Sá exerted great pressure to get the proposal off the voting agenda. This sort of political maneuvering happens often, but in this case there is something peculiar: Arnaldo Faria de Sá, the leader of the PTB party in the House, is not part of the Commission of the Defense of the Consumer. Further, he was present in the session of the same Commission on November 27th. At that session, Russomano presented the video tapes of Capistrano.

Faria de Sá's special interest in the case remains unexplained. His presence at a commission meeting of which he is not a member raises suspicions that he is acting in favor of Coke's lobbying efforts in the Congress. The coordinator of the Coke lobby is Alexandre Paes dos Santos, who has already had recognized contact with Faria de Sá.

In 2001, Faria de Sá furnished Paes dos Santos with credentials which gained him free access to plenary sessions of the House. In spite of this, there is still no actual proof that Faria de Sá and Paes dos Santos are working together in Coke's benefit.

Faria de Sá responded to inquiries saying that he no longer has connections to the Coke lobby. Regarding his participation in the December 3rd ordinary session of the Commission of the Defense of Consumers, he simply replied, "no comment."

In a collective interview on February 11, the press secretary of Dolly Soda supplied a document dated September 1, 2003, which proves that a contract was made between IPA (Paes dos Santos' business) and Coca-Cola, via Recofarma, one of the factories of Brazil Coca-Cola.

Another document dated November 19, 2003, shows proof of a contract with Ideas, Facts and Texts, a business owned by Luis Costa Pinto, a cousin of Paes dos Santos' current girlfriend. According to the document, Pinto's mission is to monitor activities of the Commission of the Defense of the Consumer in relation to any attempts to schedule a public hearing with Coca-Cola. He also is to monitor the media, especially any related news from reporters who cover the activities of the Secretary of Economic Rights.

According to the documents presented by Dolly Soda, the principal objective of Coke in contracting the lobby group is to avoid any investigations into the accusations made by Laerte Codonho. If there is to be any investigation, Coke wants it to be made through the Secretary of Economic Rights, where Coke has more lobbying power.

Documents show that Daniel de Carvalho Mendonça, the manager of government issues of Coca-Cola International, asked for a reimbursement of a dinner he had with a technical advisor of the Secretary of Economic Rights on November 19th and a December 12th lunch he had with Alexandre Paes dos Santos.

However, investigations could begin soon as house deputy Givaldo Carimbão, together with Celso Russomano, will this month propose another request for a public hearing with those involved in the accusations.

Below are excerpts of Brasil de Fato's interview with the president of Dolly Soda, Laerte Codonho:

Brasil de Fato: How in practice did Coke's scheme to take Dolly out of the market work?

Laerte Codonho: The strategy, according to the director of Coca-Cola himself, involved suppliers, the Public Ministry, the Federal Income Tax Service, sabotage and spying.

BF: How did these strategies function with suppliers?

LC: Through pressure exerted on the suppliers to try to paralyze distribution of Dolly products. This happened in October of 2000, so that Dolly would enter into the summer months without orders.

BF: And how did Coke know who was selling for Dolly?

LC: By knowing the market well, but also from data Capistrano had obtained from the Federal Income Tax Service.

BF: How did the scheme work with the Public Ministry?

LC: According to Capistrano, they would sue the Public Ministry only to create problems, a strategy he called "perturbation." Enter a lawsuit here, another one there. You perturb the Congress so that it can't do its job, which was also the case with Dolly, not letting it work.

BF: With this strategy, you think that Coca-Cola was trying to control the Brazilian State?

LC: Not only trying....they certainly thought they in fact had control. With these revelations now, the director of Coca-Cola himself says that they do not want the accusations investigated in the House of Representatives, but in the Secretary of Economic Rights (SDE). We demonstrated that Coke's manager of governmental issues had dinner with a technical advisor of the SDE, and this advisor, in this case, operates as a judge. So, you imagine the accused having dinner with the person who is going to judge this shameful case. It is shameful, wouldn't you say?

BF: In an interview with Pasquim21, you said that last year you made your accusations public at 6:30 p.m., and that at 11:00 p.m. Nelson Schincariol was killed. [Schincariol is another Brazilian manufacturer of beverages]. Is there a connection here?

LC: No. I can't confirm this. I can only say that Coca-Cola itself, through Capistrano, said that there is no competition in Mexico because they assassinated the competitors, killed them, eliminated them physically. And these are the same people who control Coca-Cola in São Paulo.

Note: Brasil de Fato contacted Coca-Cola, but due to problems with deadlines, was unable to give their version of the facts.

This article appeared originally in Portuguese in the newspaper Brasil de Fato -http://www.brasildefato.com.br. You can contact the author writing to redacao@brasildefato.com.br