Pepsi in Burma - A Globalization Catastrophe

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Case Details:

Case Code : BECG026
Case Length : 13 Pages
Period : 1990 - 2003
Pub. Date : 2003
Teaching Note :Not Available
Organization : Pepsi
Industry : Food and Beverage
Countries : USA and Canada, Burma

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

Forced to Shut Shop Completely

Even in late 1996, Pepsi's products were being bottled and marketed in Burma as before. This revelation led to serious consequences as pro-Burma factions intensified their anti-Pepsi campaigns.

Announcing the decision to hold an international hunger strike, an FBC organizer said, "We refuse to swallow Pepsi's lies about its Burma operation and its ties to the military junta. They claim they are leaving Burma, but they are not. This is nothing more than some paper shuffling. The situation on the ground in Burma is absolutely unchanged." Dr. Sein Wen agreed, "I urge the international media not to accept Pepsi's public relations claims at face value, but to look at the facts of their presence in Burma." In another development that helped the protestors, Tun participated in an SLORC-sponsored anti-democracy rally in June 1996. At this rally, he reportedly said that businesses in Burma should work towards crushing pro-democracy moves in whatever way they could...

Burma's Plight Continues

Pepsi's pullout however, did not seem to have made any impact on Burma's fortunes. In fact, since 1996-97, the situation in the country has only worsened. To boost its foreign exchange reserves, the SLORC declared 1996 as the 'Visit Myanmar Year' to attract international tourists in larger numbers.

While the country had been attracting tourists from many parts of the world due to its natural beauty, religious places and rich cultural heritage, the SLORC's focused efforts contributed significantly to tourism related revenues. In February 1997, on behalf of the Burmese people, Suu Kyi again requested MNCs not to enter the country as long as the military regime continued. She also asked various governments to make it impossible for companies from their countries to enter Burma. This request was partially fulfilled when, in April 1997, the US government banned US companies from making any new investments in Burma. The Clinton administration argued that this had become inevitable since all efforts to persuade the SLORC to enter into a dialog with the NLD and other supporters of democracy in Burma had failed...


Exhibit I: Burma - Early History
Exhibit II: Companies that Pulled out of Burma*
Exhibit III: A Pepsi Official Explains the Partial Pullout from Burma*


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