The end of Coca-Cola?

Arabic Coca Cola 

Dana Milbank writes a scathing report about yesterday’s press conference by the Sudanese ambassador to the US in response to President Bush’s new sanctions against his country, criticised as overdue by Human Rights Watch:

A dozen reporters, and a similar number of Sudanese Embassy officials, watched the ambassador for an hour as he shouted into the microphone and delivered a circular and rambling complaint about the injustice of U.S. sanctions. His fingers, fists and arms flew through the air, exposing the flashy gold watch on his wrist.

Dana goes on to dismiss the laughable idea that Sudan might halt its exports of gum arabic, hence depriving the world of a crucial component in the production of Coca-Cola:

What’s more, the good and peaceful leaders of Sudan were prepared to retaliate massively: they would cut off shipments of the emulsifier gum arabic, thereby depriving the world of cola. “I want you to know that the gum arabic which runs all the soft drinks all over the world, including the United States, mainly 80 percent is imported from my country,” the ambassador said after raising a bottle of Coca-Cola. A reporter asked if Sudan was threatening to “stop the export of gum arabic and bring down the Western world.” – “I can stop that gum arabic and all of us will have lost this,” Khartoum Karl warned anew, beckoning to the Coke bottle. “But I don’t want to go that way.”

Dana would probably laugh less if he realised that gum arabic is indeed a prime export of Sudan, which was responsible for 56% of the $90 million-worth world trade in 2000. The rest came from Chad and Nigeria, two countries which cannot be said to be the most peaceful in the world, and where production can be seriously hampered by local political upheavals and conflict too.

It is unlikely that Sudan will halt production altogether, since millions of its citizens depend directly or indirectly on this product. But there is no reason why we shouldn’t expect Sudan to retaliate against the US by dramatically increasing the price of the product, in very much the same fashion as OPEC did in 1973 thanks to its monopoly on oil production. Moreover, the protracted conflict in Darfur – one of the prime spots for the cultivation of gum arabic – is already seriously affecting exports, and price increases are a realistic expectation.

Since no one really knows the exact formula of Coca-Cola, except for its two top executives, Coke aficionados might rest in peace for the time being, especially since Wikipedia does not list gum arabic as one of the suspected ingredients. But should gum arabic be present in even little quantities – like in most soft drinks – expect to pay quite a lot more for your fizzy drink in the near future.

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2 responses to “The end of Coca-Cola?

  1. Come now – we all know that Coke probably has more military firepower on the continent than the AU! If Sudan tries to cut off exports of gum arabic, I’m predicting (a la Cassandra) that we will be treated to a proclamation declaring the Republic of Cokistan (that’s pronouned Coke-i-stan, btw).

    Actually, if the price increased, it would probably expand cultivation as a cash crop throughout the Sahel, exerting a counter-pressure that eventually undermined the cartel and led to declining terms of trade for ALL gum arabic producers…

  2. I am waiting for Bloomberg to employ you to trust your market predictions, dude…!

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