IUF | Coca-Cola Workers Network | Monthly : June 2007

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Korea: Unions secure agreement on employment security, CBA succession & trade union recognition as condition of sale

After nearly six months of tough negotiations, mediation, and planned strike action, the three IUF-affiliated unions in the Coca-Cola Korea Bottling Company (CCKBC) succeeded in securing an historic agreement with both CCKBC and CCA that guarantees employment security, trade union recognition and continuity of the terms and conditions of the current collective bargaining agreement.

The Agreement on Sale of Coca-Cola Korea Bottling Company, Ltd. signed on 19 June is a major achievement for the CCKBC North/Southeast/ Southwest Labor Unions and sets an important example for food unions confronted with the challenges of ownership change.

In April the three unions threatened strike action, forcing CCLBC and CCA into negotiations. On the eve of another strike vote on 8 June, a provisional agreement was finally reached. Following union meetings on 11-12 June, union members voted in support of the agreement on 13 June.

On behalf of the three unions, Brother Park Chang-nam, President of the Coca-Cola Korea Bottling North Labor Union, said on 26 June: “We believe that we could achieve a meaningful agreement on the sale of CCKBC and the 2007 CBA thanks to the will of our union members to be united, as well as IUF's dedicated support. We are deeply grateful to the IUF.”

Brother Park added, “Now our three unions will fight to defend the terms of the agreement on the sale of CCKBC.”

The full text of the agreement appears below.

Agreement on Sale of Coca-Cola Korea Bottling Company, Ltd.

This agreement is entered into between the Coca-Cola Korea Bottling Company, Limited (hereinafter referred to as the “Company”) and each of the Southeast Region Labor Union, the Southwest Region Labor Union and the North Region Labor Union (hereinafter collectively referred to as the “Union”) in order to collaborate on a smooth process of the sale of CCKBC in proceeding now and contribute to the development of the CCKBC. Both sides shall commit to faithfully abide by this agreement under the principles of mutual understanding, loyalty and good faith.

1. In regard to the Sale of CCKBC, CCA agrees to proceed the sale as a whole, with conditions of guaranteeing continued employment, succession of CBA and succession of the Union (recognizing the Union’s current organizational structure).

2. CCA shall admit this agreement with the Unions signed by Reg Randall, the president of CCKBC. As a proof of it, either Terry Davis or Peter Kelly who presents CCA shall send the Union an email or a formal letter accepting this agreement.

3. The Company and Union shall make this agreement notarized by the attorney-at-law to maintain its legal validity. If either party breaches the provisions of this agreement, the breaching party shall be subject to civil and/or criminal sanctions

To ensure that CCA will not violate the agreement the unions also sought an additional guarantee from Terry Davis, the CCA Group Managing Director, the letter of confirmation reads as follows:

Dear Messrs. Hoon-Jae Lee, Gung-Won Choi, and Chang-Nam Park,

I am pleased to confirm, on behalf of Coca-Cola Amatil (CCA), that under any proposed sale of Coca-Cola Korea Bottling Company ("CCKBC"), CCA guarantees that it has received clear legal advice that under Korean Law the buyer is required to honour the current collective bargaining agreement ("CBA") and all employment arrangements, including the continued operation of CCKBC's labor unions and acceptance of the terms and conditions of the CBA.

Thank you for your continued cooperation and contributions to the Company's current and future success

Best regards,

Terry Davis
CCA Group Managing Director

Further elaboration was then demanded by the unions on June 15 which was received. This is in the form of an email from CCKBC’s HR Director.

Subject: explanation about email from the CCA to admit an agreement on the sale of CCKBC

Dear presidents of CCKBC southeast, southwest and north unions

With concern of occurring a problem about the difference of expression between western and Korean, I, JaeSeong Lee (Executive Director of HR) put the meaning of email from Terry Davis that I explained while we had a meeting today as follows,

1. Terry Davis, on behalf of the CCA confirms the following number 2.

2. The CCA guarantees the following number 3 and 4 under any proposed sale of CCKBC.

3. Regarding the following number 4, the CCA received clear legal advice.

4. The buyer is required to honor the current BCA and all employment arrangements, including the continued operation of CCKBC’s labor unions.

To be brief, The following confirmed and clarified by Terry Davis that in case of the sale of CCKBC, the CCA guarantees that the buyer is required to admit and guarantee 1) current CBA, 2) all employment succession, 3) current operation of the unions.

Therefore, I judged that his email met the unions’ demands.

For your reference, I let you know that this email to presidents was reviewed and okayed by the CCA. Thank you.

Best regards,

CCKBC HR Director



Production resumed at the CCE site of Wilrijk (Antwerp) after company officials confirmed they would continue to negotiate with the Belgian unions for the renewal of the collective bargaining agreement 2007-2008, covering 1,100 Coca-Cola workers in Belgium.

Wilrijk workers had spontaneously stopped production protesting against the breakdown of social dialogue caused by an initial decision of CCE management to cancel a negotiation meeting scheduled on Thursday 28 and to resort to a conciliator instead. At the same time, union meetings among Coca-Cola workers at the Gand and Chaudefontaine facilities to discuss the situation. Facing the perspective of a Belgium-wide strike, CCE management now seems to have taken a step back and confirmed the negotiation meeting on June 28. Wage negotiations are the sticky issue on thenegotiationg table. As Bjorn Desmet, Coca-Cola National Coordinator for FGTB-ABVV explained "Coca-Cola's profits increased by 25%this year. We therefore expect a meaningful wage increase. Management proposed 6.5% over the next two years, which is totally unacceptable".

UK: CCE Workers Receive Ballot Papers for Strike Action on Wage issues



Source: Amicus section of UNITE the Union

Workers at Coca Cola Enterprises in Wakefield will receive strike ballot papers today. Coca Cola Enterprises now face the prospect of a series of 24 hour strikes at one of Europe's largest bottling and distribution centres during the height of summer. 95% of workers at the plant have rejected a 2.5% pay offer. The union is also preparing to ballot staff at the Coca Cola plant in Milton Keynes, meaning CCE face the prospect of co-ordinated action.

The 24/7 Wakefield operation produces 200 million cans of Coke a week. If the strike goes ahead, the action could have a devastating effect on supplies of Coca Cola, Oasis, Dr. Pepper and various other Coca Cola brands. Shops, supermarkets, vending machines, pubs and hotels across the UK will be affected.

Unite wants CCE to return to negotiations to resolve the dispute and avoid any industrial action.

Workers at the Coca Cola Enterprises (CCE) bottling and distribution plant in Wakefield, Yorkshire are furious that management have refused to improve their pay offer of 2.5% following talks with the Arbitration Conciliation and Advisory Service (ACAS) on 6th June. Members feel the offer is a “kick in the teeth” when RPI was 4.6% in February 2007. Coca Cola has enjoyed significant profits and a rise in stock market value.

Unite Regional Officer, Kelvin Mawer said:

“A yes vote could mean shortages of Coke at the height of summer. Coca Cola Enterprise's 2.5% pay offer has fallen flat. It means a pay cut in real terms for staff at one of the most productive and cost effective sites in the UK. "

"How can a business like CCE expect its employees to accept a pay offer far below the RPI when the same employees have contributed to the success of the business. "

"If one of CCE’s priorities is to attract and retain a highly talented workforce with a winning inclusive culture as stated by CCE’s President and Chief Executive Officer, then all employees must share in the company’s success by receiving fair pay and conditions. "

“We are extremely disappointed it has come to this and urge CCE management to return to the negotiating table in an attempt to resolve the dispute and avoid industrial action.”

Unite will not tolerate the exploitation of UK workers and will continue to fight for equal rights and equal treatment for all workers.

Ends –

For further information please contact Ciaran Naidoo on 07768 931 315.




On 12 June IUF Guatemalean affiliate STECSA and Embotelladora Central (EMBOCEN) - owned by Coca-Cola bottler FEMSA - signed a new collective agreement for 2007-2008 after months of tough negotiation. In the new agreement STECSA secured a 6.5% wage increase for 2007 and a 6.5% for 2008, along with a commitment by the company not to cut benefits previously acquired in earlier CBAs. Lazaro Serrano, STECSA's secretary of organization and statistic, told IUF Latin America that despite the positive outcome of negotiations, two key issues with the power to undermine the union's achievement and worker conditions at EMBOCEN are still unresolved. These are namely the lack of EMBOCEN's investment in production machinery, distribution fleet and marketing of its own products and the continued invasion of EMBOCEN's exclusive market by neighbouring Coke local bottlers DIMPA and ABASA.

Source: Amalia Antúnez © Rel-UITA

Second private equity fund drops out of bidding for Coca-Cola Korea Bottling Co (CCKBC)

A month after the private equity fund CVC Capital Partners withdrew its planned bid to take over Coca-Cola Korea Bottling Co (CCKBC), another private equity consortium - MBK Partners and Woongjin Capital - also withdrew its bid. While the official reason given was a disagreement over price, the public opposition expressed by the IUF-affiliated CCKBC unions was also a likely factor. In an open letter to CCA and a press release issued in both Korea and Australia, the three CCKBC unions declared that they would take industrial action to stop any attempts by private equity funds to enter the bottling plants to assess its value. Any guarantees from a private equity fund were viewed as meaningless since such funds are geared towards piling up debt and imposing business decisions based on a short-term “exit” strategy.

For more information on private equity buyouts, please visit: http://www.buyoutwatch.info

Philippines: ACCUP achieves national recognition, regular consultations to begin in August

On 28 May 2007 the IUF-affiliated Alliance of Coca-Cola Unions Philippines (ACCUP) met with the national HR Director of Coca-Cola Philippines Bottlers Inc. (CCBPI), Bebe Chavez and the HR managers for each region of the Philippines. It was the first time in the history of ACCUP and in the history of Coca-Cola in the Philippines that recognition was given to unions at a national level. Not only did this meeting establish national recognition of ACCUP, but also set in place regular quarterly meetings that would deal with worker and trade union rights and employment security.

The IUF organizer for food & beverage TNCs in the Philippines, Danny Fuentes (who acts as the ACCUP Secretary), attended the May 28 meeting, and on the request of the ACCUP leadership the CCBPI HR Director agreed that he will be given access to all CCBPI plants to conduct meetings with our members. For the past two and-a-half years Brother Fuentes has been subjected to restricted access to CCBPI worksites to meet with ACCUP-affiliated unions and on several occassions has been denied access. Under the new arrangement, Brother Fuentes will be able to enter worksites as an IUF representative.

When ACCUP was formed with the support of IUF and LEARN in 1997 management reacted aggressively, pursuing a divide-and-rule strategy that was designed to undercut the possibility of organizing union power nationally. The management of CCBPI - which was then under Coca-Cola Amatil - made it clear that ACCUP when never be recognized and unions could only negotiate with plant-level management.

This policy was continued when San Miguel Corporation (SMC) acquired CCBPI in 2001, and subsequent closures, restructuring, outsourcing and casualization decimated more than 3,000 unionized jobs at 50 worksites throughout the country. While many of the unions affiliated to ACCUP launched struggles against this attack on trade uniojn rights and employment security (including more than two dozen legal cases of which half are ongoing), the lack of national recognition remained a major stumbling block.

Following the launch of IUF’s global strategic organizing initative in Nestle and Coca-Cola in September 2004, ACCUP was revitalized in March 2005. This was faciliated by more focused and sustained support from IUF, including regular communication, documentation and information exchange. This coordination and communication both within ACCUP and between IUF and ACCUP was further strengthened following the appointment of Brother Fuentes as a full-time IUF organizer in 2006. In the same year ACCUP’s demands concerning excessive outsourcing and casualization were included in the agenda of the IUF’s consultation meetings with TCCC in Atlanta.

Although ACCUP escalated its demands for national negotiations with CCBPI management, but the company refused and instead attempted to restrict all communication with unions to workplace-level management. In May 2006 ACCUP launched a nation-wide campaign “Save Jobs, Save the Future” which generated new pressure on CCBPI management - pressure which was also channelled through the IUF.

Following the acquisition of CCBPI by TCCC in December 2006, ACCUP further escalated its demands for a national meeting with CCBPI management - a demand strongly reiterated by the IUF at the meeting with TCCC in Atlanta on 28 February. As a result of this combined pressure at international and national level, and the ongoing national campaign against outsourcing and casualization, CCBPI management agreed to meet with ACCUP on 28 May. As as result of this meeting ACCUP secured national recognition to enter into regular negotiations with CCBPI. This recognition comes on the 10th anniversary of ACCUP.

In his presentation to the IUF’s “strategic organizing in TNCs” seminar in Cagayan de Oro on 2-3 June, the National President of ACCUP, Brother Ami Ladao, thanked the IUF for its support and called on other unions (especially from Nestle and Unilever) to follow this example by being pro-active in IUF’s global strategic organizing activities.

Coke vows to reduce water used in drink production

Coca-Cola said on Tuesday it will reduce the amount of water used to produce its beverages and put more effort into recycling the water it uses in manufacturing.

Coke, which along with its bottlers used 290-billion litres of water for beverage production last year, said it would make a $20-million commitment to the WWF.

"Our goal is to replace every drop of water we use in our beverages and their production," Coke chief E Neville Isdell told the WWF's annual meeting in Beijing.

More than half the water Coke used in 2006 was dedicated to processes like rinsing, cleaning, heating and cooling, rather than going into the drinks themselves.

Coke's new measures include setting water efficiency targets for global operations by next year, and aligning its manufacturing system to return all water used in manufacturing to the environment.

The Atlanta-based company will also expand support of local water preservation efforts, like harvesting rain water, reforestation, improving water efficiency in farming, Coke and the WWF said in a statement. - Reuters

ITALY: CCHBC buys vending operator Eurmatik

ITALIA: CCHBC compra l'operatore di distributori automatici Eurmatik

Coca-Cola 2nd world bottler CCHBC completed its acquisition of the Italian vending operator Eurmatik for EUR15.8m, after similar moves in Ireland with Vendit (2005) and Hungary with Yoppi (2006). Eurmatik distributes hot and cold beverges, waters and snacks. Read full article.