Coca-Cola has vowed to get tough on its suppliers

The Coca-Cola Co has committed to a “zero-tolerance” policy over so-called land grabs in developing countries that fuel the sugar trade.

In a four-page statement, seen by just-drinks, the soft drinks group has vowed to “terminate” contracts with suppliers that do not adhere to its 'Sustainable Agriculture Guiding Principles' (SGP). The issue came into focus last month after an Oxfam report criticised Coca-Cola and PepsiCo for failing to act over concerns around its suppliers.

The charity flagged cases in Brazil and Camodia where disputes have erupted over property seized from poor communities by sugar producers that are allegedly supplying the two soft drinks firms.

In its commitment document, Coca-Cola says it believes land grabbing is “unacceptable”. It adds: “As a major buyer of sugar, we acknowledge our responsibility to take action and to use our influence to help protect the land rights of local communities.” 

The company plans to carry out “third-party social, environmental and human rights assessments beginning in Brazil, Colombia, Guatemala, India, Philippines, Thailand and South Africa”. 

The document adds: “The Coca-Cola Co commits to zero tolerance for land grabbing ... if a supplier fails to uphold any aspect of the SGP requirements, The Coca-Cola Co will work with the supplier on corrective action. If such action is not taken, the supplier relationship will be terminated.”

Oxfam’s head of private sector advocacy, Penny Fowler said: “Coca-Cola has taken an important step to show its customers and the communities it relies upon that it aims to be a part of the solution to tackling land grabs. This commitment is further evidence that no company is too big to listen to its customers.”

PepsiCo has yet to respond to a request for comment.