Poverty Footprint Study on how the Coca Cola - Oxfam America

7
Value chain:
Macroeconomic impacts*
Headlines
The total GVA 40 of the Coca-Cola/SABMiller value chain
in Zambia is estimated to be $21 million and $83 million
in El Salvador. SABMiller bottling plants, distributors and
retailers contribute a significant portion of those impacts.
In El Salvador, ILC makes up almost 20% in of the total
generated GVA impacts while distribution and retail
accounts for almost 50%.
The Coca-Cola/SABMiller value chain supports an
estimated 3,741 jobs in Zambia, including the informal
sector, and approximately 4,200 jobs in El Salvador’s
formal sector. The Coca-Cola/SABMiller value chain
supports a sizable retail sector in both countries, with
approximately 64,000 retail outlets in El Salvador and
approximately 25,000 in Zambia, most of which are smallscale
shops, often run by women.
In Zambia, Zambian Breweries paid USD53.5 million in
taxes between financial years 2006 to 2010. In El Salvador,
ILC paid USD51 million in taxes between 2005 and 2009.
To purchase supplies for Coca-Cola products in 2009,
Zambian Breweries spent approximately
$26 million and ILC spent approximately $73 million.
Many of these products were sourced via regional
or international companies since they were not
available locally.
36 Exploring the links between international business and poverty reduction
Companies play an important role in the economic
development of a country through the value of
goods they generate, the financial flows that affect
the country’s balance of payments and the overall
jobs they create. Changes in sourcing strategies,
continued payment of taxes in line with national
legislation and capacity building for employees and
local businesses can all have a positive impact on the
economic development of a country.
Calculation of impacts on GVA and
employment
The total Gross Value Added (GVA) and employment
contributions of a company include direct, indirect
and induced impacts. In order to estimate the GVA
contributions attributable to the Coca-Cola/SABMiller
value chain in El Salvador, direct impacts were
multiplied by the production, distribution and sales, 41
and sector-specific indirect and induced multipliers. 42
Wages paid to employees in the Coca-Cola/
SABMiller value chain were used as a proxy for
its value added. As a result, the GVA represents
a conservative estimate of the direct impact of
the Coca-Cola/SABMiller system, given that the
calculation of the direct impact does not capture
profits accruing to shareholders.
*The tax figures in this report are based on data provided from both companies. This study did not conduct an analysis of the financial reporting or tax planning of either company.