Coca-Cola sells 1.7 billion drinks per day, operates in 206 countries, and has 139,600 employees worldwide (half in the U.S.).
CEO Muhtar Kent thinks the U.S. will have a long, weak recovery. He says the U.S. is becoming a less friendly business environment than China, citing political gridlock and an antiquated tax structure as reasons its home market has become less competitive, reports the Financial Times. Kent said "in many respects" it was easier doing business in China, which accounts for 7 percent of Coke's global sales volume, and in the first half of this year sold more than 1 billion cases, doubling Coke's sales there in five years, and is ramping up in China with a $4 billion investment over the next three years.
He likened China to a well-managed company. "You have a one-stop shop in terms of the Chinese foreign investment agency and local governments are fighting for investment with each other."
Kent also pointed to Brazil an emerging economy that is making itself attractive to investment in ways that the U.S. once did. "They're learning very fast, these countries," he said. "In the west, we're forgetting what really worked 20 years ago. In China and other markets around the world, you see the kind of attention to detail about how business works and how business creates employment."
The U.S., meanwhile, accounts for 41 per cent of Coke's annual revenue, and the company continues to spend domestically, with a $1.3 billion investment in capital assets in North America this year. Kent said that U.S. tax burdens and political polarization are creating uncertainty for businesses and hurting investment. "I believe the U.S. owes itself to create a 21st century tax policy for individuals as well as businesses," he said.
"If you talk about an American company doing business in the world today with its Chinese, Russian, European or Japanese counterparts, of course we're disadvantaged," Kent said. "A Chinese or Swiss company can do whatever its wants with those funds [earned overseas]. When we want to bring them back, we are faced with a very large tax burden."Kent said U.S. lawmakers, stuck in political gridlock, need to be held more accountable as they debate ways to fix the economy. "When a country is in trouble, you can't have a polarized political process," he said. "There's too much comfort. We need more needles to stick in politicians."
Indeed, we do.