The Coke Machine - Michael Blanding [11]
The six-hundred-word contract would eventually revolutionize Coke’s distribution, establishing the franchise system of bottling that remains to this day around the globe. In theory, the bottlers take on all of the risk and responsibility, while the parent company provides the product and the two split the profit. In practice, however, the company and its franchisees have tussled constantly over the years, in both the United States and around the world, each one fighting to minimize its risk and maximize its control—to say nothing of the lion’s share of profit.
In the early days, at least, Coke and its bottlers existed harmoniously, in part because they had a common enemy against which to join forces. Hard-driving Sam Dobbs had been urging his uncle Asa to begin bottling for years—only to see a host of imitators crop up as soon as Coca-Cola bottling plants started roaring into operation. Some, like Chero-Cola, had been around as long as Coke. Others were fly-by-nighters capitalizing off king Coke’s success, sporting copycat names like Coke-Ola, Ko-Cola, and even Coca & Cola. “Unscrupulous pirates,” Candler fumed, “find it more profitable to imitate and substitute on the public than to honestly avail themselves of the profit and pleasure which is ever the reward of fair dealing and competition.”
Asa Candler was a firm adherent to the principles of the free market; nothing infuriated him so much as government regulation or taxation, at least whenever it infringed on the company’s right to make money. Taxes, he criticized in biblical terms, calling them “gourd vines in wheat fields” that strangled the ability for a business owner to make profit. Child labor he called “the most beautiful sight we see.” And as for unions, he did everything he could to discourage their formation, calling them “a political parasite sprung from the feculent accumulations of popular ignorance and fattened upon the purulent secretions of popular prejudice.”
When it came to imitators, however, he gave Dobbs free rein to bring the full force of government down on them to protect the business. Coke had the perfect cudgel in the recently passed 1905 Trademark Law, part of the nascent Progressive movement that had emerged in a backlash against the unbridled capitalism of the previous decade. By the turn of the twentieth century, the power of corporate interests had reached its peak, as muckraking journalists writing in the nation’s first magazines such as Collier’s and McClure’s increasingly exposed the political corruption and excesses of the robber barons in the railroad, coal, and meatpacking industries. The diatribes led to a political backlash resulting in increased regulation, breaking up monopolies and ensuring quality standards.
The new trademark law was originally passed as a way to protect consumers against deceptive marketing. Coke, however, was one of the first and most aggressive entities to use the law to defend its own rights to profit. Dobbs enlisted the company’s head lawyer, Harold Hirsch, to lead the charge against the “loathsome following,” his name for the bottlers who tried to steal Coke’s business. “I have spent my nights and my days thinking about Coca-Cola,” Hirsch once said, and he wasn’t kidding—eventually, he would amass a seven-hundred-page volume of case law that virtually created trademark law in the United States. Starting in 1909, he brought a case a week against other soft drink companies, arguing they had deliberately created their names to ape Coca-Cola.
It was a suit against one of Pemberton’s old partners that finally put the imitators to rest. Years earlier, Pemberton had sold some of the rights of Coca-Cola to his partner J. C. Mayfield, who had begun selling the formula around Atlanta under the name Koke.