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Deconstructing Dinner

Kootenay Co-op Radio CJLY

Nelson, B.C. Canada


April 27, 2006


Title: Packaged Foods Exposed I - PepsiCo


Producer/Host: Jon Steinman

Transcript: Ruth Taylor


Jon Steinman: And welcome to Deconstructing Dinner - produced and recorded in the studios of Kootenay Co-op Radio in Nelson, British Columbia. I'm Jon Steinman.

Deconstructing Dinner is a weekly one-hour radio broadcast that looks to discuss the story behind our food choices and how these food choices impact ourselves, our communities and the planet.


With many previous broadcasts of Deconstructing Dinner having now taken a closer look into the processes used to grow our food and how food issues are discussed on a mainstream level, there has yet to be much discussion on the topic of packaged foods and beverages and we have yet to take a close look behind some of these very companies who control the increasingly popular category of packaged and ready-to-consume products.


Today's program marks the first of a periodic series on Deconstructing Dinner titled Packaged Foods Exposed, where episodes will take a closer look into the world's largest producers of packaged foods and beverages. We will discover what products fall under their banners; how their influence has shaped economic policy, society and culture; how they have affected the environments they operate in; and what relationships do they create in these countries.


The company we will take a closer look at today is New York-based PepsiCo - a company that is far more than just Coca-Cola's main competitor, and based on revenues, sits at about the 4th largest food and beverage producer in the world.


In helping expose the inner workings of this company and their actions, we will hear clips from a discussion I had earlier with Richard Girard of the Ottawa-based Polaris Institute - a not-for-profit group that works with citizen-based groups in helping unravel the complex workings of corporations.


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For any of you who listen to Deconstructing Dinner on a regular basis, you may have begun to question how topics of such great importance - these topics that relate to our food; are rarely covered throughout the mainstream media. Some of the issues behind Intensive Livestock production may be touched on briefly or perhaps the emergence of Genetically Modified Foods, but when these topics do enter into media circles, they tend to pose little threat to the networks broadcasting this information. And what do I mean when I say pose a threat - well the second any television network or newspaper raises questions and concerns over what can be argued to be the most fundamental component of our daily lives - food; these networks and publications begin to put some of their key advertisers at risk. When food and beverages represent the most frequently purchased items by any human being, it can be understood why such mediums of information would take such precaution.


The most recent inclusion of food issues in the news that have been covered in a rather direct way - would be the threat of Mad Cow Disease, the seemingly explosive risk of Avian Flu and the commonly exposed concern of rising levels of obesity.


But who is often portrayed as the culprit - who do we always look to as being responsible for such concerns - federal government, provincial government, politicians, ministries, and anyone who doesn't have much influence on advertising dollars. In the case of Mad Cow Disease for example, there are many powerful companies who have aggressively lobbied government to adopt the very practices that have led to this threat, and rarely, if ever, are they mentioned. Rarely is it mentioned that the poultry industry itself has created the conditions that have led to such high risk of an avian flu outbreak. It is not very often that specific companies are targeted for their aggressive campaigns on school-age children in promoting their unhealthy products. Instead, there is a blame placed on health officials, and that easy to use term fast-food. But behind it all are companies - companies that through perhaps political donations, or just their sheer size and influence on world economies, have been the principle groups responsible for such concerns over our local and global supply of food.


One of the greatest risks posed to any television network, radio station or publication, is the raising of concern over foods with a name. Covering the topic of beef or poultry does not pose much of a threat, but when you begin to focus on products with a name - products with a recognizable brand, the media begins to step aside out of fear that advertising dollars are at risk.


When we return to Deconstructing Dinner after a quick musical break, we will take a look at the branded products of PepsiCo and expose all there is to know about this company - a company that takes up much of the shelf space in our grocery stores. In the end, we hopefully will be able to make more educated choices when walking into a grocery store, convenience store or restaurant.


Musical Break


A reminder that if you miss any of today's broadcast of Deconstructing Dinner or want to find out more about today's or previous day's topics, you can visit the Deconstructing Dinner website at You can also send your comments about the program to


On today's broadcast of Deconstructing Dinner we take a closer look into PepsiCo - who when using revenues from 2004 as an indicator, sits as the fourth largest food and beverage producer in the world.


The company is headquartered in New York State and in 2005, pulled in 32.6 billion dollars in revenues. They employee over 157,000 employees around the world in over 200 countries, and it was in 1965, when Pepsi merged with Frito Lay, that PepsiCo was formed, and although it may seem that PepsiCo sits as second in the global soft drink market next to Coca-Cola, unlike Coca-Cola, PepsiCo produces far more than just soft drinks.


So let's take a look at all the products that fall under the PepsiCo banner. The most obvious is of course their line of soft drinks, Pepsi, Mountain Dew, and Mug Root Beer to name a few. But they also produce many non-carbonated beverages such as Lipton Iced Tea, Brisk, Dole fruit juices, the bottled and ready-to-drink versions of Starbuck's Frappuccino and DoubleShot beverages. The company produces the line of Tropicana products, but what may come as a surprise to some of you, Pepsi is also the company behind Aquafina, one of the more popular bottled water brands that can be found on almost any grocery store or convenience store shelf. What is also typically unknown is that Aquafina is simply tap water that has been purified again and then bottled in environmentally un-friendly packages and resold to the public at an inflated price. One of the more recent acquisitions into the Pepsi portfolio is Gatorade, an acquisition that accompanied the entire line of Quaker products. And that moves us into the food side of PepsiCo.


Of course that nice old man on the cover of your bag of Quaker Oats or Oatmeal is now an employee of PepsiCo along with his cereals such as Life, Capn' Crunch, Harvest Crunch and Puffed Wheat. There are also the popular Quaker Chewy Granola Bars and Quaker Rice Cakes. And Aunt Jemima is also a new employee of the company with her line of syrups and pancake mixes.


But step into another one of the companies main products and it becomes further evident how much space the company receives on retailers shelves - and I'm speaking of potato chips and the like - the company produces popular brands such as Doritos, Tostitos, Lay's, Ruffles, Cheetos, Cracker Jacks, Sunchips, Smartfood Popcorn, Hostess and Miss Vicki herself is now receiving an old-age pension from PepsiCo.


So there is an obvious influence that this company has in shaping the food that is available to us, in shaping farming practices that go into producing this food, and with a company as large as PepsiCo, there is certainly a lot going on behind the scenes that the general public rarely gets the chance to see when pushing our shopping carts around the store.


To better inform us on the stories behind PepsiCo, I spoke with Richard Girard - a researcher with the Ottawa-based Polaris Institute. The Institute was conceived in 1996 following a decade of opposition to two major free trade agreements that dramatically restructured the economy and society here in Canada. With the increasing rise in power that corporations were given as a result, the institute was formed in 1997 to better mobilize citizen groups in responding to this power and help push for democratic social change. Richard has been with the Institute for 3 years after graduating with a Master's Degree from Carleton University. He has recently compiled a handful of reports that take a closer look into the major companies who are privatizing the world's water supply. One of these companies is PepsiCo, and his report sheds light on the many other facets of the company that we as the general public are typically not made aware of. And his insights will help better prepare us to make food and beverage choices that are in line with our own principles.


As PepsiCo states in its Mandate, "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today."


When I recently spoke with Richard Girard, he first mentioned how important it is to know the company behind the products we purchase.


Richard Girard: It's hard to know exactly where to start I mean there are many things that the general public needs to know, about everything, about the corporation that they're supporting when they buy their products. First and foremost I think the general public needs to know that the stuff they're buying from PepsiCo is not the kind of healthy life changing stuff that they construct through their PR and advertising. They need to try to look beyond that and ask themselves what am I actually eating here. Frito Lay, corn chips, so they say they're GM-free but what else does PepsiCo do? And what is PepsiCo? And most people don't even know that Pepsi is owned by PepsiCo it's not actually a corporation itself same with Frito Lay. So kind of getting to know the company itself is really important. I try to always tell people who owns what and get them to understand what they're actually purchasing and who they're actually supporting. So they'll find out who their board of directors are and executives. But also, the track record of a corporation like PepsiCo should be in the backs of their minds as well when they're purchasing things, who they're actually supporting


Jon Steinman: To no surprise, when checking out the PepsiCo website, there are a number of links about the generous donations the company has made in recent times. And Richard explains the importance in being able to sift through the public relations campaigns launched by companies such as PepsiCo


Richard Girard: You go to their website any corporation you go to a corporation that builds bombs and makes bullets to blow people up and they'll try to paint themselves as a great company that's doing all this help for everybody around the world but their products are actually killing people. So while PepsiCo isn't killing people they are making them overweight and fat and getting addicted, rotting their teeth, blah, blah, blah. And they're also supporting a company that has a very poor labour track record, very poor environmental track record. We'll just start with the labour issues PepsiCo has been able to kind of pass under the radar more than its main competitor Coca-Cola who has come under fire over the past few years for its labour abuses in Columbia and environmental issues. Well labour issues in Columbia now and Turkey as well as environmental issues in India, which is really having a huge impact on their reputation. Where Pepsi has been able to kind of fly under the radar even though they arguable have a worse track record when it comes to labour rights abuses, mostly because not a lot of their workers are involved in collective bargaining agreements with labour unions, because they fly under the radar they are able to deal with strike actions taken by their workers who are involved in unions. They don't care that it's a strike they'll let them go on strike and they have enough money to kind of deal with the strike and eventually get what they want. In the United States especially they've had quite a few issues, labour issue in the last five or six years where they just let the workers go on strike, and they don't really care.


Most recently in August 2005 in New Jersey there was a strike, usually the drivers who deliver the stuff you don't really hear about a strike coming from PepsiCo plants or Pepsi plants where they make the syrup and things its usually the people who are delivering the sodas to their retailers. A lot of the issues have to do with PepsiCo; their health care plans how to deal with the overtime pay, issues like this. There's a constant stream of strikes with Pepsi bottling operations in the United States over the last five years. So, people need to know that Pepsi isn't a great employer, they don't really care about their workers they make 26 billion dollars a year in revenue, and they can afford to let a few people go on strike and deal with the issues. Once it starts becoming a public relations issue for them then they will take a closer look. So, like I said they're kind of flying under the radar.


Jon Steinman: If you're just tuning in, this is Deconstructing Dinner, a weekly one-hour program that aims to discuss the impacts our food choices have on ourselves, our communities and the planet. We are currently hearing from Richard Girard of the Ottawa-based Polaris Institute, as he recently compiled a report that takes a closer look into PepsiCo, the parent company of Pepsi, Frito Lay, and Quaker products to name just a few. Today's broadcast marks the first of a periodic series that will deconstruct some of the most powerful and influential companies who specialize in packaged foods and beverages. In doing so, we can achieve an increased awareness about the companies who are filling our grocery store shelves. In further exposing the role PepsiCo has had throughout the world, Richard spoke to me about their presence in Burma, which during the mid-90s resulted in a substantial boycott of PepsiCo products.


Richard Girard: In 1997 PepsiCo finally announced that they were going to pull out of Burma, a contract they had entered into in 1991, only three years after the military took control of the government. So, they were actually one of the final companies to leave Burma. I don't know if people recall the major campaigns that were going on against different companies that were working there and basically supporting a repressive regime, very poor human rights record, using slave labour. Pepsi was a target of a major campaign run by students in Canada. Carleton University was very active in Ottawa organizing this boycott which lead to an incredible amount of bad PR for the company and huge amount of pressure put on the company who eventually did leave Burma but not after their reputation was taking a hit so that's kind of what it took to get Pepsi out of Burma. The executives of Burma were saying, when these campaigns began, Pepsi's going to stay in Burma forever we're going to stay here and it doesn't matter what you're saying. It was only until The New York Times published an article.


Jon Steinman: On the topic of PepsiCo's role worldwide, Richard Girard also spoke to me about the company's role in India. Pepsi's main competitor Coca-Cola has received a notable amount of attention for their actions in India - a country with a population of over one billion people, but as Richard explains PepsiCo is receiving just as much attention albeit in the shadows of Coca-Cola.


Richard Girard: Coke has been accused of basically drying up aquifers surrounding a major bottling operation in Kerala, India. They have come under huge amount of pressure from the locals who have actually succeeded in having the bottled water plant shut down. So, that has kind of spread across India to other bottling operations that have come under pressure from local populations who are mounting resistance to Coca-Cola which is pretty clear that what they're doing is sucking water out of the aquifers and releasing the byproducts from their bottling operations into the environment and causing environmental damage. And Pepsi has been a target of these protests for similar actions especially water taking or the people of India just don't want these companies to be there. And it's pretty clear that the companies are using a huge amount of water to bottle their products and are in fact sucking up the water dry, which they say they aren't doing, and of course they mount big PR campaigns. Coca-Cola set up rain water harvesting programs in India and they cite all of these things like it's a good thing to do in India but their bottling operations are still taking huge amounts of water and Pepsi is basically doing the same thing so they're coming under fire from local activists.


Jon Steinman: Richard recently had the opportunity to attend the Coca-Cola annual shareholders meeting in Delaware, and although not a topic of today's focus on PepsiCo, it's nevertheless an interesting bit of information on how these soft drink companies try to soften their image.


Richard Girard: I was just at the Coca-Cola annual shareholder meeting in Delaware last week, it was a very carefully prepared response by the CEO of Coca-Cola to the issues in India. Actually they planted people in the meeting to speak highly of Coca-Cola and Coca-Cola's operations in India. All of the activists who were there were asking for answers about what was going on with Coke and when were they going to leave the country entirely or clean up their act. India's a huge market, over a billion population, they want in to India and so does Pepsi so they're going to try to do whatever they can to stick it out.


Jon Steinman: One interesting point mentioned in the report compiled by Richard Girard, was that one of the cities in India that saw PepsiCo employees go on strike was in Bhopal. Now Bhopal was of course the centre of one the worlds worst industrial disasters of the past century, when in December 1984, a cloud of chemicals was accidentally released from the factory of American-owned Union Carbide, a company that was taken over by Dow Chemicals. The cloud covered half of the city and killed 3000 people immediately, 15,000 people later, and left 50,000 with permanent disabilities. So as if American interests in Bhopal have not left enough damage, those in the community now have new American companies such as PepsiCo to raise concerns about.


But yet another concern raised recently in India, was that of a Supreme Court ruling that demanded both Coca Cola and Pepsi agree to mandatory labeling of their products - labels that would indicate the level of pesticide residues in their beverages.


Richard Girard: In late 2004 Coke and Pepsi were both ordered by India's Supreme Court to actually label their products stating the amount of pesticide residues in their drinks and this was all because earlier that year Coke was actually banned in the Indian parliament because it was found out that they had huge amounts, very high level concentrations of pesticides and insecticides in their products. Some test samples actually show that the toxin levels were thirty times the standard allowed by the European Union. People are outraged by this and this is not just people in the Indian parliament but the population of India in general. Pepsi and Coke have both taken a huge hit because of this pesticide issue and if you look at the financial results for India they're very low and not really recovering because of this conflict. This issue actually began in 2003 when an independent group started doing some studies on the drinks and found there were huge amounts of pesticides in the drinks. So people were quite angry in the parliament they ban the sale of Coke and Pepsi in its cafeteria. The fact remains that they did have this high level of pesticide inside the drinks and they were trying to sell them to people.


Jon Steinman: And you're tuned in to Deconstructing Dinner. Going to take a quick musical intermission and when we return, we will continue hearing from Richard Girard on how PepsiCo exerts their influence on government and helps shape the policies that govern our supply of food.


Musical Break


Jon Steinman: You're tuned in to Deconstructing Dinner, a weekly one-hour radio program produced at Kootenay Co-op Radio in Nelson, British Columbia. On today's program we are taking a closer look into PepsiCo, as this marks the first of a periodic series titled Packaged Food Exposed.


We've been listening to clips from my conversation with Richard Girard of the Ottawa-based Polaris Institute, as he recently compiled a report on the company.


In better understanding how large multinational corporations exert their power and influence on government, PepsiCo's actions present a great example of how the sheer size of a company can greatly influence what we eat and how we perceive the food we choose to eat.


Richard Girard: Pepsi like most corporations, huge multinational corporations, they're members in many different industry associations otherwise known as lobby groups who are incredibly powerful in forming legislation and government policy especially in the United States. Their membership in The National Soft Drink Association for example the National Soft Drink Association is basically a lobby group for all of these drink corporations and they are able to lobby the government and legislators and members of congress and senators in the United States and push forward favorable policy.


Recently the policy dealing with universal labeling of food products in the United States was just passed through congress and that means that the States aren't allowed to have their own special labeling for different products that there's going to be universal labeling through out the country and that is basically an initiative by the industry to get around more strict labeling laws in states like California who have very strict labeling laws. And the National Soft Drink Association and all of the drink corporations have a huge hand in pushing that legislation forward. They're lobbying very hard and were able to get a favorable outcome it's not a law yet but it's an example of how powerful these companies and their associations are. Another example would be Pepsi's membership with the US Council on International Business which is another lobby group basically they kind of went after the World Health Organization in 2003 over a report that the World Health Organization has come out with that says that sugar should only count for 10% of a healthy diet and soft drink consumption is to be blamed for the obesity epidemic. So you know the Sugar Association which is part of the USCIB they threatened the World Health Organization that they were going to use their lobbying power to get the United States government to withdraw its funding for the World Health Organization if the report wasn't withdrawn. So groups like the National Soft Drink Association said that the report was very restrictive and not based on available finds so this is another example. PepsiCo is a member of the national soft drink association and it's in their interest to not have the World Health Organization publish a study that says that soft drinks are to blame for the obesity epidemic and that people should restrict the amount of sugar they eat. So this is another example of how PepsiCo through their associations with these big groups are able to influence major reports which would have great influence on the general public and what they actually consume and the information they receive about the food we're eating.


Jon Steinman: A reminder that should you want to learn more about this program, you can visit the program's website at Again, we are currently hearing clips from my conversation with Richard Girard of the Ottawa-based Polaris Institute, as he recently compiled a report that takes a closer look into PepsiCo, the parent company of Pepsi, FritoLay, and Quaker products to name just a few.


As I spoke with Richard on this topic of the political influence PepsiCo has through the company's associations with industry lobby groups, Richard also shed light on the ways PepsiCo has contributed to various politicians and political campaigns - ranging from Richard Nixon all the way to George W. Bush. In a sense, when our food supply is controlled by a handful of companies who all make political donations to the candidates and committee members who suit their needs, we as the consumer and the general public, ultimately are paying for these campaigns when we purchase food from these companies. So who do we support when we purchase Pepsi products?


Richard Girard: PepsiCo's not any different from any other Fortune 500 company in the United States in that they have a number of high-level political connections with the government in the United States meaning former PepsiCo executives are now working for the US government or former high level US government employees and politicians are now working at PepsiCo, they're entwined. I can give you some examples; one example which is actually quite old now but Richard Nixon, former president of the United States, he used to work as a lawyer for Pepsi-Cola before it was known as PepsiCo. The former Chief Executive Officer of Pepsi-Cola David Kendall who was good friends with Richard Nixon actually phoned Nixon in 1970 in September he was asking for protection of Pepsi's interests in Chile after Salvador Allende, a socialist president in Chile, after he was elected. He was scared that Allende was going to nationalize everything. So, PepsiCo's CEO called up Richard Nixon and said "hey what are we going to do about this guy, I need to protect my interests here in Chile..." We all know what happened to Allende he was deposed, in a coup, and everyone knows that Nixon and Kissinger were pretty much behind a lot of what happened there. I mean that's a clear example of the political power of PepsiCo it was a long time ago but these connections kind of linger. People know that that happened and Pepsi still gives quite a bit of money in political donations to different politicians after George Bush was elected for the second time PepsiCo donated 100,000 dollars to his inauguration celebration and PepsiCo of course like other corporations they give political donations to politicians that might be working on issues or legislation that would be favorable towards the corporation. So, the company sets up political action committees in the United States which are designed to funnel money to different politicians. PepsiCo strategically focuses these donations on different congress or senators that are on different committees and the congress that might be working on favorable legislation.


Jon Steinman: As Richard Girard also points out in his report on PepsiCo, which by the way can be found either at or you can visit the Deconstructing Dinner website. In addition to these other politicians Arnold Schwarzenegger is another politician who has received PepsiCo support, and not even behind the scenes. As Pepsi was a very noticeable advertiser in Terminator films, they also contributed to his political campaign ads with one ad containing a total of five different Pepsi products strategically placed throughout the advertisement.


But one of the most controversial roles that PepsiCo has played in shaping North American culture and contributing to the well-being of us here in Canada, is the aggressive nature in which the company has made it's way into the public school system.


Richard Girard: Both Coca Cola and Pepsi know that they need to capture consumers at a young age so they become used to drinking Coke or drinking Pepsi. They also know that school boards are under budget and cash strapped and a great way for them to capture these young consumers who will be with them for the rest of their lives, they'll be loyal to a certain brand the rest of there lives, is to offer school boards, schools universities and public schools exclusive contracts. So that means that a university for example would sign a contract with PepsiCo and exclusively sell their products on campus so you wouldn't be able to buy a Coca Cola on campus it would only be Pepsi. I would call this a dirty marketing trick.


Basically they're luring these universities and schools into these exclusive contracts they're offering large sums of money to the schools and they can't really turn them down because they don't have the proper amount of funding and usually the exclusive contracts are secret between the administration and the corporations so people don't know what happened or why they're left without having any choice or any say and who their school is basically made the agreement with.


Right now there are many universities and student activists in different campuses around North America are starting to organize and saying "hey what's going on with these exclusive contracts? I want to now why we signed it." We need to start resisting this and when it comes to public schools it's usually the parents who are confronting the corporations or the issue of selling sugary drinks in the schools which is part of the problem in the United States and Canada where kids have access to buying these sugary drinks. So, therefore we have an obesity epidemic.


Doing research on finding out how many schools in Canada have exclusivity contracts it's very hard to find out exactly who it is. I've featured three schools in my report on PepsiCo but I'm sure there are more. The Ontario Secondary School Teachers Federation said that there were 205 out of 425 schools that responded to a survey conducted by the federation said they have exclusive contracts with soft drinks. I'm not sure exactly how this breaks down now but at the time it said that 65 of the 205 schools had contracts with Pepsi and 115 with Coke.


Jon Steinman: As Richard Girard explained these exclusivity contracts to me, he also indicated that this strategy is not the only way the company puts itself directly in front of children and youth. The company even advertises in schools through an American-wide program, a television program, called Channel One.


Richard Girard: So Channel One started in 1990 it's a twelve minute news show that happens everyday. It goes to different schools across the United States and has now featured 12,000 schools, so it reaches eight million kids whose schools agree to show the program are specially wired and loaned televisions to each classroom and each telecast includes a two minute commercial for different products like running shoes, bands, and soda pop in the case of Pepsi. So, it's because of this direct advertising to the children that the channel has become the centre of some controversy over the years especially dealing with the issue of advertising in schools. So, Pepsi and Gatorade, which is owned by Pepsi, are Channel One's core advertisers.


Jon Steinman: As Richard explained the influence PepsiCo has on youth when securing school contracts and advertising directly in the schools themselves, the message of consuming such unhealthy products produced by this company is of course a subject for debate. So the company developed a public relations marketing strategy and began to promote healthy eating in conjunction with Pepsi products. In relation to schools, in March of 2005, the company targeted all 15,000 middle schools in the United States with its get-fit message. One method used was the creation of the Smart Spot logo, which is explained in greater detail on the PepsiCo website which is Now the Smart Choice logo is one that helps direct consumers who are interested in healthier choices to products that meet certain nutritional requirements. One of the products fitting this Smart Choice category is the new Pepsi One Soft Drink which has virtually no nutritional benefits whatsoever and contains the highest amount of caffeine of any Pepsi soft drink. Another product listed in the Smart Choice category is Cap'n Crunch Swirled Berries cereal, which from a nutritional standpoint may contain healthy ingredients, the term healthy though, is very often only used as an indicator of nutritional value and vitamin and nutrient levels with any secondary nutritional characteristics being rarely mentioned. One of these questionably healthy ingredients in Capn'Crunch is BHT, which is commonly used as a food additive. Serious concerns have been raised about the use of BHT in food products. BHT is a suspected mutagen and carcinogen, and has been banned for use in food in Japan, Romania, Sweden and Australia. Even in the United States has barred it from being used in infant food. To further emphasize its questionable use, McDonald's of all companies, has not seen BHT in its products since 1986. So is PepsiCo really promoting healthy eating, or is it simply a marketing gimmick. Again, you can check out PepsiCo's health website by visiting


When we return to Deconstructing Dinner, Richard Girard will shed light on how PepsiCo has marketed false health related information in order to sell their products. Stay tuned.


Musical Break


Jon Steinman: And you're tuned in to Deconstructing Dinner as we take a closer look into PepsiCo - the parent company of Pepsi, Frito-Lay and Quaker.


If the ways in which PepsiCo conducts business hasn't yet posed enough of a surprise given what has been touched upon on today's program, the company is also one of many multi-national corporations who strategically avoid paying some of the taxes on the income the company pulls in. And Richard Girard of the Polaris Institute explains.


Richard Girard: PepsiCo of course like many multi-national corporations has many subsidiaries. Six of these subsidiaries that I found in my research are situated in the Cayman Islands, which are a known tax haven that charges very little corporate income tax to companies. PepsiCo like to situate their subsidiaries in tax havens where they basically don't have to pay tax. So under U.S. tax laws lets say a U.S. company incorporates a subsidiary in a foreign country is considered a foreign citizen and actually therefore is no longer considered a U.S. residents so this means that PepsiCo doesn't have to pay U.S. taxes on income from this foreign based subsidiary. So you know this is an issue, tax avoidance. Certain activists in the United States they go after companies for their tax avoidance and it is kind of another disgusting way that companies are able to have there bottom line by avoiding to pay taxes at home so PepsiCo isn't a stranger in this department a lot of corporations use tax havens.


Jon Steinman: As mentioned earlier, Richard recently compiled a comprehensive report on PepsiCo, and in one instance of the report, he refers to recent controversy over the company's marketing strategy for one of their Tropicana products.


Richard Girard: Tropicana orange juice is PepsiCo's orange juice brand. In June 2005 PepsiCo was advertising Tropicana's healthy heart brand as they claim that drinking two or three cups of this juice a day would lower blood pressure with in 6 to 8 weeks so the Federal Trade Commission in the United States looked into their advertising campaign and they actually found out there was no specific evidence to support the statement that drinking two or three cups of the juice a day would lower their blood pressure. So, you know eventually PepsiCo had to agree to end its claims that the orange juice reduced the risk of heart disease and strokes. This is a classic example of corporations pushing the envelope for how they can market their products as healthy and life enhancing and basically saying "you need to drink this and you're going to get better you wont have heart attacks if you drink my product."


Jon Steinman: As I wrapped up my conversation with Richard Girard, he pointed to one important fact that sets up a topic for a future Deconstructing Dinner broadcast, and that is how the sale of soft drinks throughout the world is in fact decreasing, due partially to concerns over rising levels of obesity and poor health. But soft drink companies like PepsiCo have responded to this trend.


Richard Girard: Sales of Pepsi and Coca-Cola and the sugary drinks are going down constantly. I monitor the media and this industry daily and we look at the quarterly reports or different reports, industry reports, on soft drink consumption; and soft drink consumption is going down. And the companies are becoming more and more involved in the bottled water industry and what they call healthier beverages. I mean this is a whole different issue, the bottled water industry. The sale of Aquafina, which is PepsiCo's bottled water brand, and Dasani, Coke's bottled water brand, they're going up and up and up all the time. Drinks like bottled water you know raises a whole other issue of corporate control of our water, water resources, and the fact that the bottled water that they're selling is tap water. It comes from municipal sources and they're bottling it and marketing it as healthy water and selling it for a huge mark up, but anyway that's another issue.


Jon Steinman: And that was Richard Girard of the Ottawa-based Polaris Institute. You can find out more about the institute at, where there is also a link to his report on PepsiCo and other companies. We will hear from Richard in an upcoming show of this Packaged Foods Exposed series, when we will look behind the scenes of the most powerful packaged food and beverage company in the world - Nestle. And you can stay up to date as to when that broadcast will air by checking out the Deconstructing Dinner website -




Jon Steinman: With the many injustices that seem to accompany the PepsiCo company wherever they go, it is amazing to think that there are human beings behind such disregard for the well-being of others and our planet. So who is behind the PepsiCo company, well let's take a look at the Board of Directors. For one, sitting on the board is John Akers who is most well-known for his role at IBM. But Akers also sits on the board of the W.R. Grace Company, and if any of you saw the John Travolta film A Civil Action, well that film featured W.R. Grace who was one of the two companies who allegedly contaminated the water in Woburn, Massachusetts, a striking similarity to the water issues surrounding PepsiCo. But W.R. Grace is also the company that successfully patented a fungicide made from Indian neem-tree oil - now neem-tree oil is an oil derived from a tree that has been used in India for over 2,000 years, and it's been used in a countless number of ways. When the W.R. Grace Company patented the oil from the tree, groups in India of course were up in arms that a company had patented a part of a tree that has been a staple of Indian culture and part of everyday life. So over half a million Indians signed a petition that eventually led to the U.S. Patent office overturning the patent.


Also on the board of PepsiCo is Robert E. Allen - who is also a board member for Bristol-Myers Squibb - one of the largest pharmaceutical companies in the world - a seemingly convenient relationship when the North American diet of convenience foods such as those produced by Pepsi, are consistently the culprit when pointing to increasing rates of poor health and disease. With poor health and disease comes the need for medication, and Bristol Myers Squibb is there to help.


Now if you visit the PepsiCo website, there is a link that as of the date of this broadcast directs visitors to the announcement proclaiming that the company donated 2 million dollars to Pakistani earthquake victims. And I use this to introduce the next board member at Pepsi Co - Daniel Vasella who is the chairman and CEO of Novartis - another one of the worlds' largest pharmaceutical companies. Prior to his role at Novartis, Vasella was with Sandoz pharmaceuticals a company that eventually became Novartis through a merger with AstraZeneca. Sandoz is the company that in 1987 at a conference titled, the Laws of Life, predicted that by the year 2000, there would only be five big agrochemical companies (such as themselves), and they declared that they better have patents on seeds, the foundation of our food supply. Now in places like Pakistan, local seed varieties are the foundation and history of the Pakistani people themselves, much more so than here in North America, so while PepsiCo gives money to help Pakistani earthquake victims, they use their other hand via this board of director relationship for example, to take control of Pakistani culture and sustainability.


Another interesting connection between Novartis and PepsiCo is again one that relates to the diets that companies like PepsiCo promotes. Picture sitting down on your couch with a 2 litre bottle of Pepsi and a big bag of Doritos and when the ensuing stomach pains creep up and overtake your enjoyment of watching perhaps John Travolta on the screen, what do you do. Well, you look to Novartis to provide you with a bottle of Maalox or Ex-Lax, two of the companies' signature products. Maalox helps relieve indigestion while Ex-Lax helps relieve symptoms caused by lack of fibre or rushed and irregular eating patterns. PepsiCo and Novartis seem like a marriage made in heaven.




Jon Steinman: In finishing off today's broadcast, I will leave you with two quotes, the first is PepsiCo's mission which as you'll notice contains the word healthy, but pay attention to where it's mentioned, and their mission is, "To be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors."


The company also has a vision that is listed on the website and that vision reads "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today."


Earlier in the broadcast I listed off all of the products that fall under the PepsiCo banner. If you missed that part of the show, I'll repeat that list in a more abbreviated format, but there is of course a list of all of their products at And those products read as follows:


Soft drinks such as Pepsi, Mountain Dew, and Mug Root Beer products. They produce many non-carbonated beverages such as Lipton Iced Tea, Brisk, Dole fruit juices, the bottled and ready-to-drink versions of Starbuck's Frappuccino and DoubleShot beverages. Tropicana products, Aquafina bottled water and Gatorade.


Quaker products such as Oats, Oatmeal, cereals such as Life, Capn' Crunch, Harvest Crunch and Puffed Wheat. The popular Quaker Chewy Granola Bars and Quaker Rice Cakes. Aunt Jemima is a new employee of the company with her line of syrups and pancake mixes.


The FritoLay component of the company produces such products as Doritos, Tostitos, Lay's, Ruffles, Cheetos, Cracker Jacks, Sunchips, Smartfood Popcorn, Hostess and Miss Vicki herself is also employed by the company.


ending theme


Jon Steinman: That was this week's edition of Deconstructing Dinner, produced and recorded in the studios of Nelson, British Columbia's Kootenay Co-op Radio. I've been your host Jon Steinman. I thank my technical assistant Dianne Matenko.


All of those affiliated with this station are volunteers, and financial support for this station is received through membership, donations and sponsorship from local businesses and organizations. For more information on the station or to become a member, you can visit, or dial 250-352-9600. And should you have any comments about tonight's show, want to learn more about topics covered, or would like to listen to previous broadcasts, you can visit the website for Deconstructing Dinner at


Till next week.


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