The transnational corporation is concerned about public regulations implemented in Mexico, one of their most important markets in the world. To exert influence on these regulations, the company recurs to diverse methods: the signing of politicians to operate in their favor, the funding for scientific studies or the sponsoring of government campaigns.
By Kennia Velázquez and Elizabeth Rosales
Coca Cola is a fixture in the life of Mexicans: it is in their everyday meals, their parties, and even in the traditional altars to commemorate the deceased on Día de los Muertos. Just behind the United States, Mexico is the most important market for this beverage firm: the country buys 47% of the total volume of products destined for Latin America.
The Coca Cola Company pays special attention to their 120 million Mexican customers and is increasingly concerned about public policies implemented in the country. Their annual reports include an analysis on the measures proposed by different governments and projections for their business partners of ways in which these can affect their operation and, most of all, the profits. That is why the firm has applied strategies in Mexico to prevent, delay or weaken the regulations that restrict its activities.
One of the methods is the signing of politicians. This modus operandi consists in recruiting ex presidents, ex Secretaries of State and other kinds of public servers to obtain benefits from these relationships and influence on the political scope. The transfer from a high level political position (when a tenure ends) to a post in the private sector, and vice versa, is known as “revolving doors”.
Mexico “is the country where networks between business elites are tighter thanks to associations like the Mexican Council of Businessmen. Such initiatives are even encouraged by the State itself and, thanks to this, big entrepreneurs are able to weave huge networks among them”, explains Julián Cárdenas, researcher at the University of Valencia. He has long studied this phenomenon, as well as the links between corporations and public services.
Ex president Vicente Fox has been most open about his relationship with the company. He was employed by Coca Cola for 14 years before becoming a politician. To reach the presidency, he sought support from all sectors of society. In 1998, he created a civil association, Amigos de Fox (Friends of Fox) with crucial help from his former workmates at the bottler plant, like Lino Korrodi -his campaign manager- and José Luis González, “El Bigotón” (the one with the big mustache in Spanish), once president of Coca Cola Mexico. In fact, it was that company that gave Fox the first great donation for his campaign, as he confessed on the air on the Household Name podcast in 2018.
Once in power, Fox added Cristóbal Jaime Jaquez, who worked at the beverages firm for 12 years, to his team. Jaquez was named director to the National Water Commission; during his tenure, water concessions for subsidiaries of Coca Cola and Nestlé tripled in number. Fox also invited Fernando Elizondo Barragán to be the Secretary of Energy; he is the grandson of Manuel Barragán Escamilla, founder of Arca Continental, the largest Coca Cola bottler plant in Latin America.
Fox’s case is not exceptional. Ernesto Zedillo, president from 1994 to 2000, also joined the Coca Cola Company as adviser right after he finished his incumbency. During his mandate he allowed food and drink advertising to be self-regulated by its own industry. Some of his former collaborators followed his steps and joined Coca Cola. One of them, Genaro Borrego, had been director of IMSS, the Mexican Institute of Social Security; another one, Roberto Campa Cifrián, had been Secretary of Labor and Social Development, Under Secretary of State and prosecutor at the Federal Consumer Protection Office.
One more with links to Coca Cola was Luis Téllez Kuenzler, chief of Zedillo’s office and later Secretary of Energy. Kuenzler was adviser for FEMSA until 2005. A year later, he was incorporated into Felipe Calderón’s government as Secretary of Communications and Transports.
“The former presidents’ personal and political preferences in the formulation of health policies, the historical links of the Mexican presidency, and the interests created in allowing a continuing prosperity for Coca Cola” have played an important role in legislation, says Eduardo J. Gómez, academic at the King’s College London who has deeply studied Coca Cola’s political influence in Mexico.
In 2012, Enrique Peña Nieto became president and named Mercedes Juan López Secretary of Health. She had been executive president of Funsalud, a civil organization sponsored by some of the main pharmaceuticals, hospital corporations, and food and drink companies in Mexico; she was also advisor to the Coca Cola Company. During her tenure, she strongly opposed taxing sugar-sweetened beverages.
Under Peña Nieto, dozens of big firms enjoyed debt write-offs and tax cancellations; one of them is the Oxxo convenience chain stores, part of the FEMSA conglomerate, the largest Coca Cola bottler in the world. The civil association Fundar reports waivers of around 3.3 million dollars between 2015 and 2019.
In May 2020, FEMSA announced that it had reached an agreement, without resorting to judicial powers, with the Tax Administration Service to “end interpretation differences” that went on about tribute payments abroad. FEMSA paid 43 million dollars for this concept.
The Coca Cola Company’s most recent signing is Patricio Caso Prado, a former COFEPRIS (the Federal Commission for the Protection Against Sanitary Risks) and Social Security officer during the Peña Nieto administration. Three years after he finished his tenure, he joined the corporation as Senior Director of Government Affairs, according to his LinkedIn account.
Caso was one of the designers of a controversial frontal labeling for food products implemented between 2015 and 2020, notwithstanding the critical assessment of the World Health Organization and numerous researchers, physicians and food security advocates; their argument was that the labeling benefitted the sugar-sweetened beverages industry and propitiated a major consumption of sugars.
Recently, the World Health Organization published a document that strongly judges these sorts of practices, defining them as “commercial determinants of health”, or private sector activities that affect people’s health. In the case of sugar-sweetened beverages, the risk factor is leading to cardiovascular disease, diabetes, obesity and dental problems.
It is a highly relevant topic, because these products have played a fundamental role in the precariousness of the Mexican people’s health, as they account for more than 24,000 deaths each year, as reported by the National Public Health Institute in 2020. Among young men under-45, they cause 22% of total deaths from diseases mentioned above; among women of the same age, the percentage is 33%.
PopLab requested the Coca Cola Company an answer about the signing of former politicians and officers. They replied through an email: “As a multinational corporation with global standards and employment policies, we make sure we attract and retain the best possible talents. We take permanent care of our selection processes and talent hiring stays objective and impartial to assure a diverse, inclusive and equitative representation, as well as equal opportunities no matter who they are or where they come from”.