Wednesday, April 25, 2007
MSN Money just posted an article saying that Coca Cola's stock may be a good investment these days. Here's my response:
Coca Cola may be a reasonable stock option for financial reasons, but they are a poor choice for ethical reasons. Unethical investment choices these days, often play out to be poor financial choices as well, especially with the rising awareness of global warming, waste, and fossil fuel use.
Coca Cola, although they have recently pledged to reduce the pollution and water use from their Atlanta facility, have singlehandedly caused entire towns in 3rd world countries to be without water for crops and has left toxic waste in their factories wake.
The consumer beverage industry as a whole is an environmental catastrophe. Billions of gallons of water are diverted from agricultural use for it's production, even in India and other 3rd world countries where water is scarce to begin with. Toxic chemicals are produced, then the processed, sugary concoction is packaged in aluminum or plastic and shipped long distances, using even more fossil fuel. Coca Cola's Dasani water brand is an excellent example of consumer waste wherein tap water is passed through a reverse-osmosis filter, packaged in plastic (parts of which are leeched into the water in the bottle), and shipped far away, so that people can drink the same water that they could get out of their tap, leaving a trail of unnecessary waste and fossil fuel use.
Financially, I would be willing to bet that with environmentalists such as Lester Brown discussing the drawbacks of using bottled water, especially in America where tap water is safe to drink almost everywhere, the Dasani branch of Coca Cola will likely lose significant value in the coming years. We have already seen 7up changing to "natural" ingredients and because of the "mainstreaming of green" and increased consumer awareness, we very well may see a slow decline in the mass-produced consumer beverage industry on a whole.
Sincerely,Clint Slaughter, M.D.