Tempests in a Pop Bottle

By Barbara Rudolph

For most of its 99-year history, the Coca-Cola Company has known only the sweet taste of success. This year, though, Coke seems unable to do anything right. First the Atlanta-based firm infuriated customers by changing the sacred formula of Coke. Then it had to swallow hard, admit error and bring back the old mixture under the label Coca-Cola Classic. Next the company angered textile workers by marketing a line of Coca-Cola clothes produced overseas. Now Coke is under attack from the sugar industry for allegedly misleading the public about the ingredients of its No. 1 product.

The Washington-based Sugar Association, which represents refiners and processors of sugar beet and cane, spent $235,000 last week to take out anti-Coke newspaper advertisements in 13 major cities. The ads charged that Coca-Cola Classic is not the "real thing" because it is sweetened with corn syrup, while the drink's original formula called for sugar, which is slightly more expensive. Of course, the Sugar Association has a keen financial interest in the sweetener question because its members do not make the corn syrup that is now used in most soft drinks. The decision by beverage companies to switch sweeteners is one reason why per capita sugar consumption has fallen by some 26% since 1978.

Coca-Cola responded to the sugar industry's criticism with a four-page press release accusing the Sugar Association of misleading the public. The company acknowledged using corn syrup for the past five years. Coca-Cola pointed out, however, that the fructose in corn syrup, as every high school science student should know, is as much a sugar as sucrose, the technical name for beet or cane sugar. "The fact of the matter," said a Coca-Cola spokesman, "is that sugar is sugar is sugar." Even so, in May the company changed Coke's label to read "high fructose corn syrup and/or sucrose." Coca-Cola maintains that there is no difference in the quality or taste of the two forms of sugar.

Some cola purists beg to differ. Says Gay Mullins, a retired real estate investor from Seattle who founded the Old Cola Drinkers of America and helped lead the successful protest against the new Coke: "Corn syrup is like lead in my stomach. It doesn't give me the lift. It makes me sleepy." But industry analysts perceive no difference. Says Montgomery Securities' Emanuel Goldman: "Original and Coca-Cola Classic are one and the same thing."

Coca-Cola probably could not help but be caught off guard by the sugar industry's assault. Its run-in with textile workers, though, was an avoidable gaffe. Last month Coca-Cola unveiled a line of men's and women's casual clothing manufactured by Murjani International of New York City under a license from the Atlanta company. The Murjani products included bright-colored sweaters ($40), sweatshirts ($34) and jean jackets ($52), all bearing the Coca-Cola logo. The trouble began when textile officials discovered that the clothes were made in Asia, despite being advertised as "All-American." Several textile companies angrily removed all Coke dispensers from their workplaces and refused to bring them back until Coca-Cola changed where its clothing was made.

After a wave of bad publicity and a meeting with about 30 representatives of textile companies and unions, Coca-Cola announced last week that from now on any clothes bearing its name that are sold in the U.S. would be made in the U.S. Only Coca-Cola clothes sold abroad would still be made in Asia.

Despite Coke's conciliatory action, the damage had already been done. Says Lee Wilder, who follows Coke for Robinson Humphrey, the Atlanta-based investment firm: "Coke is an American symbol. The company opened itself to a lot of embarrassment by putting its name on foreign-made clothes. It was plain dumb."

Finally, Coca-Cola's setbacks have extended even to outer space. Coke and Pepsi were aboard the latest flight of the space shuttle Challenger, but at a press briefing last week the astronauts said that neither soft drink was satisfying. Reason: the spacecraft has no refrigerator. Said Mission Commander Gordon Fullerton: "Warm cola is not on anybody's list of favorite things." --By Barbara Rudolph. Reported by Leslie Cauley/Atlanta, with other bureaus

With reporting by Reported by Leslie Cauley/Atlanta, with other bureaus