RPT-BREAKINGVIEWS-Coke bottles bitter US economic formula

By Jennifer Saba

NEW YORK, July 23 (Reuters Breakingviews) - Mexico is a frequent target of Donald Trump’s ire, but he prefers the Coke sold there. After holding conversations with the president, Coca-Cola KO.N unveiled plans to roll out a version of its signature soda using cane sugar, as it is sold south of the border, instead of corn syrup. Even setting aside the idea of the Oval Office occupant influencing one of the world’s most successful recipes, it’s a classic case of industrial policy gone awry.

The $300 billion company has occasionally tinkered with the Coke formula over its 139-year lifespan, removing the cocaine that was originally included in 1903 and introducing a sweeter New Coke in 1985, which created a marketing disaster. After Coca-Cola and other carbonated beverage makers started using corn syrup for their U.S. products in the 1980s, the so-called Mexican Coke, bottled with purer sucrose, became a cultish find in supermarkets.

Making it more widely available bubbles up a multitude of complications. Homegrown sugar – as Coca-Cola CEO James Quincey vowed to use – is pricey because the Department of Agriculture tightly controls production and limits imports. There have been levies on it since 1789, and the U.S. government started providing farmers with financing in 1981 to help underpin prices. It costs about 50% more today for domestic sugar than what’s sold internationally, according to the Sweeteners Users Association trade group.

There’s also the matter of U.S. support for corn. It’s the most subsidized crop in the country, with growers receiving some $3 billion of direct payments, insurance and loans from the government. The feed grain accounts for 30% of all U.S. agricultural assistance. Championing Coke with sugar muddles the various policy objectives while also inviting more imports from Mexico.

Moreover, both ingredients contradict other White House positions. Although Trump guzzles Diet Coke, his Secretary of Health and Human Services Robert Kennedy has denounced high fructose corn syrup and sugar as poison and wants to prevent low-income Americans from buying soda with their food assistance money. These clashes over Coke’s recipe mainly serve to accentuate distasteful U.S. economic formulas.

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CONTEXT NEWS

Coca-Cola said on July 22 that it plans to roll out a version of its signature soda sweetened with U.S. cane sugar instead of high-fructose corn syrup after President Donald Trump issued a statement on July 16 saying he had been discussing the idea with the company.