The cola wars have broken out again on U.S. college campuses, with old villains and heroes changing places. PepsiCo Inc., once applauded for rejecting white-ruled South Africa, is in danger of losing a new generation of customers over its sales of soft drinks in military-ruled Burma.
A rapidly growing national campaign against PepsiCo by student activists appears to be a boon for the Coca Cola Co., tainted a decade ago by its South African involvement but now praised for shunning the Burmese military government and its terrible human rights record.
"We don't want to do business with anyone who does business with Burma," said Douglas Steele, an anti-Pepsi first-year law student at Georgetown University who has won an appointment to the university's investment policy committee.
PepsiCo and other companies in Burma say they oppose the military government's abuse of power and would leave if the U.S. government told them to. They argue their activities help the Burmese people by raising living standards and showing the fruits of democracy.
So far they have found few defenders of their point of view on campus. Students at about 75 schools, including American University, James Madison University and Virginia Tech, have begun pasting boycott appeals on Pepsi soft drink machines and lobbying for university trustees to join shareholder revolts against business in Burma.
This week the director of dining services at Harvard University reversed a plan to transfer $200,000 in business from Coca-Cola to Pepsi after several meetings with students who charged PepsiCo was contributing to forced labor in the poor southeast Asian country.
On Monday, activists at Pennsylvania State University held an anti-Pepsi panel titled "The Choice of a New Genocide" to push for a ban on PepsiCo products and a policy against corporate involvement in Burma. About 2,000 Stanford University students have signed a petition to block a Taco Bell Corp. outlet on campus because the fast-food chain is a PepsiCo subsidiary.
"Burma has become the South Africa of the '90s and the problem that Pepsi has is that they can find people that feel like this on campuses around the world," said Simon Billenness, a senior analyst at the Boston-based Franklin Research & Development Corp.
Billenness's firm manages about $500 million in investments for clients who want to make "socially responsible" investments -- no dictators, polluters or human rights violators. He said that several oil companies, including Texaco Inc., Atlantic Richfield Co. (Arco) and Unocal Corp., have a more significant interest in Burma than PepsiCo, but the beverage and food company is more vulnerable to college pressure because it is consumer-oriented and "built on a notion of youth."
Elaine Franklin, manager of corporate information at PepsiCo, said the company entered a soft drink joint venture in Burma in 1991 with Burmese entrepreneur U Thein Tun. The initial Pepsi investment was only $1 million, but the company has grown to more than $8 million in revenue a year.
The company, with 240 Burmese employees, is the major sponsor of sporting events in Burma, which the military government and the United Nations prefer to call Myanmar. Franklin said the Pepsi firm has competed successfully against a government-owned firm and brought down the average price of a 10-ounce soft drink from 17 to 12 cents.
"PepsiCo certainly does not support tyranny and terrorism," Franklin said. She said Pepsi believes "that we can best promote the well-being of the citizens of a country by providing quality products, employment, social benefits, trading opportunities and introducing new ways of thinking."
Marco Simons, a Harvard junior who helped lead the successful campaign to keep Pepsi off of his campus, said Pepsi's Burmese partner had close ties to the military government, known as the State Law and Order Restoration Council.
Harvard dining services director Michael P. Berry said he canceled plans to switch to Pepsi in dining halls and restaurants after students protested, but he thought Pepsi had a good argument in its defense of its Burma operations.
Elizabeth W. Abercrombie, a 19-year-old first-year student at James Madison, said about 20 Madison students picketed a Pepsi warehouse in Weyers, Va., on Jan. 28. They were putting up notices of their protest on Pepsi machines on campus.
U.S. firms doing business in some authoritarian countries, such as China, have had the support of local dissidents, who argue that U.S. money and business practices help break down anti-democratic regimes. But in Burma, as in South Africa a decade ago, the leader of the pro-democracy, anti-government forces -- Nobel Prize winner Aung San Suu Kyi -- appears to support a withdrawal of foreign business as a weapon against the government.
John Imle, president of Unocal, said the dissident leader has not been entirely consistent in that position. But representatives of her group have supported the anti-Pepsi movement and the withdrawal decisions of other U.S. firms, such as Columbia Sportwear Co. of Portland, Ore., which announced last week that it was pulling out.
Last May, Franklin Research and Development and the Maryknoll Fathers and Brothers, a Roman Catholic missionary group, tried to win shareholder approval of a new code of conduct for PepsiCo at its annual meeting. The measure won less than 6 percent of the vote, but it was enough to qualify automatically for this May's ballot.
Joseph P. La Mar, assistant treasurer for corporate social responsibility of the Maryknoll group, said the campaign also was seeking, so far with limited success, new conduct codes or bans on Burma business at Unocal, Arco and Texaco. He said the incoming Texaco chief executive, Peter Bijur, "is quite open to talk to us and hear our proposals."