Ex-Coca-Cola Workers Shut Down Facilities of Former Employer in Venezuela

Mérida, February 13, 2008 (venezuelanalysis.com) – Ex-workers of Coca-Cola in Venezuela took over and shutdown 13 distribution centers and one bottling plant of their former employer over the past week. The actions are the culmination of a heated severance pay dispute that has persisted since the workers were laid off in 2003.

On Monday Coca-Cola Femsa legal director Rodrigo Anzola declared that the company "believes in and respects Venezuelan law," which is why it demands that the Minister of the Interior and the Defense Ministry intervene to bring to an end the "illegal and unconstitutional" blockage, which has affected 45% of the commercial activity of the company and 36% of the current workers.

The 5,000-strong group of fleet workers and contractors claim Coca-Cola Femsa owes them a total of $520 million, but Anzola insists that no contractual relationship has ever existed between these workers and the current ownership.

Regiomontano Industrial Group, which currently owns Coca-Cola`s Venezuela bottling franchise, claims that when Regiomontano took over operations in 2003, the ex workers were laid off by the previous franchise owner, Panamco. According to this argument, the ex-workers are violently demanding payment from a company that never employed them.

But the ex-workers are backed by National Assembly legislators Iris Varela, Marcela Máspero, and Reinaldo García, who advocate that the federal government should expropriate Coca-Cola`s Venezuelan bottling plants and produce "Venezuelan soft drinks instead" if the company does not comply with worker demands. Anzola decried that the legislators are "deceiving" the ex-workers by promising impossible rewards that the company cannot possibly provide.

The legislators also supported the ex-workers when they blocked off all four of Coca-Cola Femsa`s bottling plants in October 2006. The total stoppage brought the case to the Venezuelan Supreme Court. A "dialogue table" was initiated, which Anzola claims took 90% of the cases off the table, leaving only a few cases related to sick relatives, for which the company created $4 million fund that clearly is not enough to compensate the workers' current demands.

While rumors suggest the ex-workers have no plans to give in, current employees pleaded with the ex-workers to open distribution lines because over half of Coca-Cola Femsa`s 8,000 workers do not have fixed salaries, so when distribution stops, so do their paychecks. "We understand the situation of the ex-workers, but we do not want them to affect our right to work," union leader Joel Echezuría proclaimed Tuesday. Echezuría asked that they "go to the courts… if Coca-Cola owes them, that is what the courts are for," echoing the company line.

The current workers also told the legislators involved to get back to their work in the National Assembly and let the workers reach an understanding with the company on their own, reminding them that the Unemployment Assistance Law still has not been passed.

Echezuría and his co-workers, along with their affiliate Guyana Gaseous Beverages Workers Union and workers unions in the state of Bolívar, are already battling with Coca-Cola Femsa over salaries and benefits. Workers claim their salaries have not increased in over a year and a half, and should be adjusted to be consistent with inflation. In early January of his year, the union blocked off Coca-Cola`s distribution lines and took to the streets after contract negotiations went on for six months without results.

Apart from these disputes, Coca-Cola Femsa has also faced disciplinary measures from the federal government. All of the company's Venezuela operations were shut down for 48 hours for tax evasion in March 2007. The disciplinary measure was part of the "Zero Evasion" plan initiated in 2004 by the Integrated National Customs and Tax Administration Service (SENIAT).

According to news reports, the purchase of bottling operations in Venezuela in 2003 converted Coca-Cola Femsa, a Mexican firm, into the largest Coca-Cola distributor in Latin America. The former chief Coca-Cola bottler and Venezuela operator, Panamco, is accused of hiring paramilitary thugs to murder union leaders at their plants in Pasto, Carepa, Monteria, and Barranquilla, Colombia, from 1990-2002. This is especially troubling considering that Chávez denounced increasing paramilitary activity in Venezuela on his weekly talk show Aló Presidente last Sunday.