Coca-Cola: Misleading Obesity Research (2015)

Controversy

The Coca-Cola Company corporate
headquarters in Atlanta, Georgia

An ethical controversy that Coca-Cola has gotten itself into is manipulation of research and deceiving customers on anti-obesity measures. Coca-Cola was funding a substantial amount of the Global Energy Balance Network, or GEBN.  GEBN was an organization aimed at researching and fighting obesity, headed by a professor at the University of Colorado.  Once this funding information became public, the organization shut down.  In addition, Coca-Cola’s chief health officer stepped down around the same time frame where these funding woes began supposedly due to significant involvement with GEBN. Coca-Cola had direct input into the direction of the nonprofit group, further questioning the authenticity of its research.  For example, Coca-Cola “reportedly paid $550,000 directly to James Hill, president of Global Energy Balance Network” (Addady).  This appears to be an example of a shady, untrustworthy dealing.  In addition to the $550,000 that the company paid to James Hill, Coca-Cola also gave a million dollar donation to the University of Colorado, which is where Hill taught.  If that wasn’t enough suspicious activity into the intent of Coca-Cola’s funding of an anti-obesity organization, they have “reportedly donated about $4 million in funds since 2008 to projects run by two of the organization's founding members -- Blair, and Gregory A. Hand, dean of the West Virginia University School of Public Health” (Shankar).  The GEBN made the claim that “there is ‘strong evidence’ that the key to preventing weight gain is not reducing food intake - as many public health experts recommend – ‘but maintaining an active lifestyle and eating more calories’ ” (O’Connor).  The claim being made is that diet does not make a difference in weight loss, as long as it is balanced well with exercise.  This type of research is that in question, when several other reliable sources contradict the findings of this one group.  If a group funded by Coca-Cola said to reduce caloric intake of things like soda, then their sales would decrease. 

The questionable ethics are that Coca-Cola’s product line is filled with sugar and caffeine, which has the potential for adverse health issues.  The problem is that they are falsifying information that links their product to obesity, saying that obesity is caused by other factors, not drinking their product, which could hurt their sales. 

Global Energy Balance Network (GEBN) Logo

Stakeholders

Coca-Cola executives and employees are stakeholders in this situation, because the Coca-Cola Company is the one influencing the research that was done by the Global Energy Balance Network.  Other stakeholders are members of the GEBN, because they are the individuals that were distributing what was supposed to be non-biased research information about health and lifestyle when they were in fact biased to not make Coca-Cola look bad.  In addition, the universities that GEBN members are a part of can be considered stakeholders, since they have university and research affiliations.  It could also be said that consumers of Coca-Cola products are stakeholders, as they pay for the product, and were possibly mislead by the GEBN’s research information about the potential downsides of consuming Coke’s products.

Individualism

Individualism is the notion that the primary goal of a company is to lawfully maximize profits.  From the individualist standpoint, Coca-Cola did not do anything wrong.  They were merely trying to protect their assets and profits from declining.  It then would become a legal issue to determine whether or not it was legal for the Global Energy Balance Network to publish its findings that were known to be biased, not completely truthful, and in some arguments deceptive.  Friedman’s theory of individualism states “business should not attempt to be “socially responsible.” Spending money on resources, employees, and donations to causes is wrong” (Salazar 17-18).  Coca-Cola discretely funded and supported the GEBN and individuals that were critical to its creation.  These can easily be classified as spending money on donations to causes.  According to Friedman, Coca-Cola was deceitful in order to protect its profits.  From the utilitarian perspective, Coca-Cola was not socially responsible by trying to protect or increase its sales and therefore its profits by being deceptive and not being transparent with consumers or other organizations.  At the same time, Coca-Cola was socially responsible on the surface, by spending money on health research regardless of the fact that it was biased and/or skewed research.  Therefore, Coca-Cola was not doing anything wrong and was acting ethically from part of the Utilitarian perspective, however was acting unethically from another part of the Utilitarian perspective. 

An example of the amount of sugar in different
sizes of Coca-Cola bottles, shows with sugar cubes

Utilitarianism

Utilitarianism is the idea that businesses should act in ways that maximize happiness in the long run for all individuals that are affected by the business action.

  In this regard, Coca-Cola was acting in a way of deception towards the consumer and general public, and therefore was acting in an unethical way.  From the perspective of the company executives and employees, they were acting in favor of the GEBN financially, and influencing its outcomes and the organization’s directions.  In turn, they would profit from the potential increase in sales and in turn job security.  For this set of stakeholders, it would be a positive outcome- provided their actions went unnoticed.  From the perspective of the members of the GEBN, their actions can be considered positive, since if their research was viewed as credible, then Coca-Cola’s profits would increase, and they would continue receiving funding, giving a positive image to Coke, as well as to themselves for publishing this research.  The positive image that would have resulted, would have also benefited the universities that the GEBN members were a part of, through notoriety from research, if it was credible.  The consumers of Coca-Cola products can be seen as the largest, broadest group of stakeholders that the decisions of Coke and the GEBN would affect.  If the consumer feeds into the idea that drinking more soda and increasing their activity level is good for their health, then this would have a realistically negative impact on their health.  It is even possible to consider this the absence of happiness in the long run, from the multitude of adverse side effects of drinking an increased amount of Coca-Cola.  Other actions the company could have taken were to reach out to independent research agencies to look into its products, or to make consumers more aware that moderation is key when consuming their products.  These alternative actions, would have excluded the creation of the GEBN, and would have had a negative impact on Coca-Cola despite the potential for honesty in research.  Instead, they chose to deceive consumers by saying increasing caloric intake as well as increasing daily activity was a healthier lifestyle.  “Coke’s support of prominent health researchers was reminiscent of tactics used by the tobacco industry, which enlisted experts to become “merchants of doubt” about the health hazards of smoking” (O’Connor).  Just based on the fact that Coca-Cola’s tactics were being compared to sales tactics used for the tobacco industry, an even more significant and well-known health hazard, shows that their influence over research is not acting in a positive manner for a majority of stakeholders involved.  Although the actions that were taken appeared to be in good judgment for two of three groups of stakeholders, there is greater consequence due to the scale of the group that is affected negatively from the outcome of the actions that were taken, and the severity of the adverse health effects.  The ability to choose to consume the product or not, was altered by the actions of the other stakeholders.  In these ways, Coca-Cola acted unethically from the Utilitarian perspective, due to the well being of the majority group being affected negatively.  

Kantianism

Kantianism’s standpoint is to respect other individuals, without lying or deceiving them in any way to gain benefit for yourself, the notion of doing what is right, because it is the correct thing to do regardless of the loss or benefit of the outcome. Decisions are made on good intentions, and not just the consequences of the outcome of an action. Coca-Cola’s actions with creating and backing the Global Energy Balance Network were those that cannot be considered moral from a Kantian point of view. Kantianism states “[a company] will not attempt to manipulate or exploit employees or consumers, but rather they will attempt to work together with others to create products and services that anyone can agree make good choices available in the marketplace” (Salazar 21). Because the GEBN has manipulated information that they are passing to the consumer as fact, this is a direct act of manipulation and exploitation of the consumer. In this way, the consumer cannot make a “good choice” of products to purchase since the information that the GEBN and therefore Coca-Cola is trying to pass off as truthful findings, is in actuality false information that does not allow the consumer to make an informed judgment about the products that they are purchasing. The motivation of the company for their actions is also considered in Kantianism. The motivations for Coca-Cola to direct findings of the GEBN are to increase the profits of its “junk food” in a health-conscious society. Therefore, the motivation and intention of its actions of deceiving consumers was not morally just in the Kantian point of view.

Virtue Theory

Ahmet Muhtar Kent, CEO of Coca-Cola
until 2016

Virtue theory focuses on the motivation of actions based on self-interest, or the interest of others. In addition, it evaluates character of the individual, as well as a company as a whole in regards to its corporate culture. Virtues are positive traits, whereas vices- the opposite of virtues- are negative traits. “Courage, honesty, wisdom, justice, prudence, temperance, intelligence, insight, care, compassion, leadership, and teamwork are just a few of the many virtues that can help business people” (Salazar 23). In the case of Coca-Cola and the Global Energy Balance Network, a lack of honesty, in addition to deception of several other virtuous traits resulted in a non-virtuous outcome. Coca-Cola, was not honest about its research findings through the GEBN, and had negative insight and care in its actions. Although its actions seemed virtuous, with motivation being the well-being of others in the form of having insight and caring, the fact that the actions were in its own self-interest in skewing information that was put out to the public as truth makes its deception far outweigh its seemingly virtuous actions. The actions of Coca-Cola through the GEBN were out of self-interest, meaning an increase in profits without considering the well-being of others, while putting up a front that a company that produces junk food high in empty calories and sugars would care about the health of its consumers. In an E-Mail to Coca-Cola Executives, James Hill of the GEBN states “It is not fair that Coca-Cola is signaled out as the #1 villain in the obesity world…I want to help your company avoid the image of being a problem in peoples' lives and back to being a company that brings important and fun things to them” (Associated Press). This one E-Mail correspondence shows that the motivation behind the Global Energy Balance Network, which again goes to show that the actions behind its inception were anything but virtuous. Coca-Cola and the GEBN actually did have the virtue of courage, since they took a major risk of publishing incredibly controversial research that they passed off or believed to be true, in order to produce the image that they stood behind as again described in the E-Mail quote above. This risk was virtuous, however the lack of other virtuous actions strongly outweighs this idea. Temperance is an idea of virtue that is to act in regards to reasonable expectations. Coca-Cola was not shown to have the virtue of temperance. If the GEBN had reported to Coca-Cola that their hypothesized research of an increase in caloric intake were proven to not be true, they could have easily influenced the GEBN to not report any findings, since a neutral stance would have shown more reason and restraint than false findings. This was also an apparent act of the vice, dishonesty. Finally, is the assessment of the virtue of justice. The virtue of justice can be evaluated by looking at its ideas, fairness, and product quality. The idea pushed by Coca-Cola is to increase its profits from a product that is not necessary to sustain life. It is made from ingredients that are known to cause adverse health effects. Coca-Cola was not necessarily acting fairly from an obesity standpoint when paired with the GEBN, since they were knowingly putting out false, misleading information that is unfair to the consumer, especially those that like to educate themselves on how a product they may be consuming would affect them. The product quality of Coca-Cola is questionable, and therefore not virtuous. As mentioned earlier, the ingredients in Coke are well known to cause adverse health effects leading to obesity. In addition, the “product” output by the GEBN is their research findings. Their research findings are questionable, and have been disproven by several other organizations. Therefore, the products both Coca-Cola and the Global Energy Balance Network are producing, are of poor quality, and are not virtuous. Overall, Coca-Cola and the GEBN did act virtuously when looking at courage, however from the viewpoints of honesty, temperance, and justice, they did not act in a virtuous manner, cannot be considered to have said virtues, and therefore acted unethically.

An advertisement to show people
the reality of how unhealthy Coca-Cola is

Justificated Ethics Evaluation

The actions of Coca-Cola and the GEBN cannot be considered ethical and were not justifiable.  Through the GEBN, Coca-Cola was able to give deceiving information to its customers and the general public.  It was publishing its findings as credible, which it then intended to secure its sales and therefore its profits. There is more evidence showing that “Exercise…expends far fewer calories than most people think. A 12-ounce can of Coca-Cola, for example, contains 140 calories and roughly 10 teaspoons of sugar. ‘It takes three miles of walking to offset that one can of Coke’” (O’Connor).  This contradicts the claim of the GEBN, which claimed that “it is easier to sustain at a moderate to high level of physical activity (maintaining an active lifestyle and eating more calories)… attempts to restrict calorie intake over the long term are likely to be ineffective” (GEBN).  Other reputable and replicable studies have shown that although a sedentary lifestyle does contribute to weight gain, so does the consumption of junk foods high in sugar, and it takes a significant amount of exercise to compensate for that sugar.

            The controversy overall is that Coca-Cola and the Global Energy Balance Network were caught using deceiving research strategies that resulted in the non-profit shutting down under scrutiny.  Neither group can be considered innocent with the trail of E-Mails that have been documented and released (Associated Press) depicting the real intentions behind the GEBN and Coca-Cola’s funding of the organization, as well as its connections with setting the mission statement and objectives of the organization. 

Company Action Plan

To correct its intentions, Coca-Cola needs to be much more transparent about its actions.  In addition, its research focus should be on the ingredients in its products that make it as unhealthy as it is, and re-gain trust with its consumers by looking into consuming its products in moderation, in addition to maintaining an active lifestyle.  It is not up to the company or a nonprofit like the GEBN to make decisions on diet and exercise for the consumer, however for Coca-Cola to reinstate a positive brand image with its consumers, it must be able to give them the facts without being deceiving, or lying by saying that an individual must consume more calories to maintain a healthy lifestyle.  In addition, this research must be transparent enough to the point where Coca-Cola cannot have direct ties with setting the mission or “vision” of said research or research organization.  The current Mission Statement of Coca-Cola includes the phrase “to create value and make a difference” (Mission, Vision & Values).  In order for the company to create value, it must be trustworthy with its consumers and other stakeholders.  Trustworthiness in order to create value means that deceiving research and denying involvement with their influence; financial or otherwise, to non-profit groups or organizations that may take away from said “value”, cannot happen.  To make a difference, Coca-Cola should continue and potentially increase donation to causes that fit the company mission statement and non-profit organizations that it follows and supports, provided that these organizations give credit where credit is due to Coca-Cola. 

Coca-Cola's usual winter advertisement;
Polar Bears enjoying the refreshment

            A possible new mission statement for Coca-Cola could be “To be trustworthy and loyal while making a positive wave of refreshment across the World.”  Their current mission statement is very vague and ambiguous in terms of ethical practices.  This new one includes ones that would require ethical standpoints and practices; being trustworthy to consumers, employees, and other stakeholders, while being loyal, or remaining true to their company values and roots of producing the same classic soft drink that has been a global icon for over 100 years, in order to help the company to achieve a positive image of nostalgia, rather than one of a giant corporation that is deceptive and is the cause of the World’s obesity problems.

            New marketing should be health and activity-driven, rather than just activity driven.  Hints and cues of product consumption in moderation is enough for the company to act ethically without destroying sales, making its consumption an informed personal choice.  The honesty is what people appreciate and value, which would in turn not drive consumers and investors away like a company that is unethical, deceiving, and manipulates data to increase sales. 

References

"About." Internet Archive, 16 Mar. 2015. Web. 27 Sept. 2016
     <https://web.archive.org/web/20150316035537/http://gebn.org/about>.

Addady, Michal. "Coca-Cola Paid $550K to Head of Anti-Obesity Group." Fortune. N.p.,  
     27 Dec. 2015. Web. 06 Sept. 2016. <http://fortune.com/2015/12/28/coca-cola/>.

"Excerpts from Emails between Coke, Anti-obesity Group." The Big Story. Associated Press, 
     24 Nov. 2015. Web. 6 Sept. 2016
     <http://bigstory.ap.org/article/eac573c073b6429bb302d94acc787c2b/excerpts-emails-between-     coke-anti-obesity-group>.

"GEBN." Internet Archive, 30 Dec. 2015. Web. 27 Sept. 2016
     <https://web.archive.org/web/20151230202948/http://gebn.org/>.

"Mission, Vision & Values." The Coca-Cola Company. N.p., n.d. Web. 19 Sept. 2016
     <http://www.coca-colacompany.com/our-company/mission-vision-values>.

O'Connor, Anahad. "Coca-Cola Funds Scientists Who Shift Blame for Obesity Away From Bad
     Diets." The New York Times. The New York Times, 09 Aug. 2015. Web. 20 Sept. 2016.
     <http://well.blogs.nytimes.com/2015/08/09/coca-cola-funds-scientists-who-shift-blame-for-
     obesity-away-from-bad-diets/>.
Salazar, Heather. The Business Ethics Case Manual: The Authoritative Step-by-Step Guide to
     Understanding and Improving the Ethics of Any Business. Print.

Shankar, Sneha. "Coca-Cola Funded Anti-Obesity Nonprofit GEBN Shuts Down."
     International Business Times. N.p., 05 Dec. 2015. Web. 06 Sept. 2016.
     <http://www.ibtimes.com/coca-cola-funded-anti-obesity-nonprofit-gebn-shuts-down-after-
     allegations-cokes-2205431>.