Global Economics

Tibet Could Sap Coke's Olympic Zing


So far the soft-drink giant and other sponsors won't temper support for the Games because of China's Himalayan crackdown. That might change

Tibetan organizations protesting the Chinese crackdown in the Himalayas are turning up the pressure against corporate sponsors of the Beijing Olympics. A prime target is Coca-Cola (KO), co-sponsor of the Beijing Olympic torch relay. The most ambitious in the history of the modern games, the 2008 relay began on Mar. 24 in Olympia, Greece, and will go to 21 countries and involve more than 21,000 torchbearers by the time it reaches Beijing for the Summer Games' opening ceremony on Aug. 8. Coke, along with Chinese computer company Lenovo and South Korean electronics giant Samsung, has spent millions of dollars (the companies won't disclose the exact amounts) to sponsor the relay. Lenovo designed the torch and provided free laptops to Olympic officials. Samsung plans to pass out Samsung flags in all 134 cities along the route. Coke nominated 100 environmental activists to serve as torchbearers.

However their marketing strategies took shape before the latest violence in Tibet, where dozens of people have died since anti-Chinese protests started on Mar. 14. So instead of winning uncritical publicity, corporate sponsors have come under attack. Human Rights Watch issued a statement on Tuesday, Mar. 25 urging Coke, Lenovo, and Samsung to pressure Beijing to reopen Tibet and calling for the torch relay to avoid the region unless the Chinese government agrees to an independent investigation into the recent unrest. Tibetan activists (BusinessWeek.com, 3/20/08) are also planning protests in London, Paris, San Francisco, Mumbai, and other cities when the Olympic torch relay passes through and are also calling for the corporate sponsors to withdraw.

Politicians in the West are starting to respond to the pressure. On Mar. 25, for instance, French President Nicolas Sarkozy discussed the possibility of boycotting the opening ceremonies. According to a report in the Associated Press, Sarkozy responded to a question about a boycott by saying he would "not close the door to any possibility." French Foreign Minister Bernard Kouchner has spoken favorably of a boycott of the opening ceremonies. On Mar. 26, U.S. President George W. Bush, who has said he plans on being in Beijing for the first day of the Games, phoned Chinese President Hu Jintao to discuss the Tibetan situation.

Not Their Responsibility?

When it comes to corporate targets, the activists are focusing their pressure on Coke because they say they hold the Atlanta-based soft drink company to higher standards. A group of 153 Tibet organizations sent a letter to Coke Chairman and Chief Executive Officer E. Neville Isdell demanding that the company withdraw its sponsorship of the relay and lobby the International Olympic Committee (IOC) to cancel the leg of the relay passing through Tibet and via Mt. Everest. "You cannot, as a responsible American company, leave American values at the border in exchange for access to a lucrative market," says Jacob Colker, campaign manager for International Campaign for Tibet, a Washington (D.C.)-based organization that works to promote human rights and democratic freedoms in Tibet. "It's not acceptable, and it's not appropriate. They need to really consider this sponsorship of the torch relay, especially if it continues to go through Tibet."

So far, Coke and the other sponsors have taken the position that the problem in Tibet is an issue to be resolved by the government and is outside their responsibilities as corporate sponsors. In an interview in Beijing, Coke spokesperson Christina Lau would not comment when asked by BusinessWeek about Tibet and the torch relay. However in a statement issued by the company last week, Coke spokesperson Kerry Kerr said: "While it would be an inappropriate role for sponsors to comment on the political situation of individual nations, as the longest-standing sponsor of the Olympic movement, we firmly believe that the Olympics are a force for good. We remain committed to supporting the torch relay, which provides a unique opportunity to share the Olympic values of unity, pride, and inspiration with people all over the world."

The other sponsors say they have no plans to dial down their marketing for the Beijing Olympics in response to the outcry over Tibet. "As a private organization, Samsung is not in a position to influence politics," says Kwon Gye Hyun, vice-president and head of global sports marketing at Samsung Electronics. Bob Page, manager for Lenovo's Worldwide Olympic Games Project, agrees that Lenovo's role is not to advise governments on policy. The situation "needs to be resolved at a regional level by governments," he says. "It's not the role of an Olympic sponsor to advise any government on political policy."

Journey of Harmony?

Privately, corporate sponsors of the Olympics are starting to grow concerned (BusinessWeek.com, 2/20/08) over protests over Tibet. They're also worried about other groups such as those critical of Beijing's support for the government of Sudan and its campaign against separatists and civilians in Darfur. Risk analysts have been reaching out to Tibetan activist groups to try to gauge how much of a public relations disaster the riots in Tibet will be for their corporate clients. But the corporate sponsors must tread carefully to avoid making China lose face before the Olympics, especially if they want to continue doing business in China.

China is hoping to use the torch relay (introduced by Adolf Hitler's Nazi propaganda machine to glorify the Third Reich during the 1936 Berlin Games) to usher in what organizers call the "magnificent celebration" of the 2008 Games. China is hoping the relay, with its "Journey of Harmony" theme, will highlight "Chinese people's aspiration for a harmonious world with lasting peace and universal prosperity," Games organizers said in a statement for the opening of the torch relay.

After a six-day tour through Greece, the Olympic flame will arrive in Beijing on Mar. 31. From there, it will embark on a 21-city Asian tour including Almaty, Kazakhstan; Pyongyang, North Korea; and Hong Kong. A separate flame will be transported to Tibet to be taken to the top of Mt. Everest on a day in May when the weather permits. Nepal and China will close access to Mt. Everest on May 1-10 to prevent protests from marring the Olympic torch's ascension to the top of the mountain.

The Olympic flame will pass through Tibet again on June 19-20 as part of the 113-city relay covering all 31 Chinese provinces, special autonomous regions, and municipalities. Even though Tibet still remains closed off (BusinessWeek,com, 3/17/08) to journalists and tourists, presumably for security reasons, Chinese authorities say they have no plans to alter the torch relay route through Tibet. "We know the incidents are the last thing we want to see, but we firmly believe that the government of the Tibet Autonomous Region will be able to ensure the stability of Lhasa and Tibet, and also be able to ensure the smooth going of the torch relay in Tibet," Jiang Xiaoyu, executive vice-president of the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG), told reporters at a Mar. 19 press briefing, before Tibetan activist groups sent their letter to Coca-Cola.

International Campaign for Tibet's Colker says he is hoping Coca-Cola will use some of its political capital in China to persuade the International Olympic Committee and BOCOG to cancel the torch relay leg through Tibet by June. "I can promise," he says, "that at some point between now and August—especially if the torch continues through Tibet and if Coca-Cola remains a sponsor of the relay—there's no question in my mind that Coca-Cola will have a major public relations issue."

For more, see BusinessWeek's slide show.


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