The history of Coca-Cola in Western Europe in the early post-war years offers a fascinating case for studying the close links between Cold War politics, business interest and cultures of consumption. In the United States the Coca-Cola Company had successfully branded its product as closely linked to the ‘American way of life’ in the inter-war period. This image was strengthened, and was projected globally, during the Second World War when the company (having secured a lucrative contract with the American military) pledged that every American G I would be able to get an ice-cold Coke wherever he was sent.Footnote 1 This secured Coca-Cola an iconic status. When the American soft-drink producers entered the European market, typically in the late 1940s, communist critics narrated this as yet another example of an American imperialist plot to dominate the world. ‘Are we being Coca-Colonised’, the French communist daily L'Humanité asked in 1949, while Italian communists coined terms such as Coca-Colèra and Coca-Colitis.Footnote 2
The opposition to Coca-Cola in France developed into a campaign to secure a ban on the American soft drink that has been analysed in detail by the historian Richard Kuisel.Footnote 3 This campaign brought together a strange alliance ranging from communists to Conservatives and wine producers. While French beverage producers had a clearly protectionist agenda, the communists were not the only ones who saw the issue as one with much wider ramifications. The Catholic newspaper Témoignage chrétien described Coca-Cola as ‘the avant-garde of an offensive aimed at economic colonisation’ while liberal Le Monde argued that the criticism of Coca-Cola in reality was a criticism of ‘the civilisation . . . of which it is the symbol’. At the height of the French polemic, the parliament voted in favour of a law that would enable the government to ban Coca-Cola because it would pose a public health risk (due to the content of phosphoric acid in the drink). However, a ban was never realised. The government worried that banning Coca-Cola would have serious repercussions for American–French relations, and in 1951 the Ministry of Agriculture concluded that the drink conformed to French law. Yet, whereas the Southern Europeans in France and Italy fought the American icon Coca-Cola – and lost – in the two Nordic countries, Denmark and Sweden, local business and national politicians chose less vocal but more efficient strategies. In Sweden cola drinks were until 1952 virtually prohibited by law with reference to the content of phosphoric acid.Footnote 4
The most successful case of resistance was, however, to be found in Denmark. Although Coca-Cola was originally marketed in Denmark in the 1930s, the American company encountered massive difficulties in the Danish market for soft drinks after the Second World War. It was only able to re-enter the market in 1959. When Coca-Cola was finally relaunched in Denmark, the American company found itself in a unfamiliar situation as Coca-Cola was facing a very strong competition from a local cola brand, Jolly Cola.
The history of Coca-Cola in post-war Denmark is clearly a complex trans-Atlantic encounter of the sort that has for many years been analysed under the heading of Americanisation. Since the late 1980s the dominant position in Americanisation studies has been that Americanisation was not a simple transfer process. Transfer is not just selective. The thing transferred is transformed in the process, as recipients adapt, hybridise or creolise American originals to fit into new settings. In this interpretation interest is focused primarily on the resources and capacities of those on the receiving end. However, in recent years this interpretation has been challenged by researchers who argue that the relationship of power should be taken into account and who point out that this was a highly asymmetrical encounter between a global superpower and European nation states. A prominent representative of this line of argument is the American historian Victoria de Grazia, who in her book Irresistible Empire (2005) analyses the successful penetration of Europe by American businesses in the mid-twentieth century as the victory of a specific American form of consumer-oriented capitalism over European capitalisms that were typically elite-oriented and focused on well-established vested interests.Footnote 5
This article draws on a similar analytical framework, combining political and economic history with more culturalist analyses of the Cold War and Americanisation.Footnote 6 However, as we will demonstrate, the Danish case study can also be used to question de Grazia's fundamental claim of the irresistibility of the American market empire. The empire – in our case the Coca-Cola Company – encountered fierce resistance that in different forms was quite successful. In a first phase, in the early 1950s, the well-organised beverage industry, building on a well-established tradition for anti-competition behaviour, lobbied effectively to protect the home market against the American competition. The result was a special cola tax, introduced in 1953, that made production of cola drinks unprofitable in Denmark. This tax came under growing pressure in the late 1950s and was eventually abandoned in 1959. In this second phase lobbying by Coca-Cola and her Danish allies was important but the policy change is better explained by looking at the changing economic environment of the late 1950s, not just in Denmark but in Western Europe. Resistance to ‘America's advance’ continued after 1959 as the Coca-Cola Company came to face strong competition from the local Jolly Cola brand, produced by exactly the same business interests that persuaded the Danish government to introduce the cola tax six years earlier. In this third phase, the picture becomes much more complicated as the resistance to Coca-Cola now was based on a strategy of copying Coca-Cola while sale figures quickly demonstrated that Danish soft-drink consumers were more than willing to become Americanised. The history of Coca-Cola's encounter with Denmark in the 1950s and early 1960s is, however, not only interesting as a case of resistance and eventual adaptation. It also demonstrates that the outcome of this American–European struggle to a high degree hinged on local actors rather than American ones.
False beginnings
Coca-Cola was originally launched in Denmark in 1935. While competitors from the breweries were very highly critical of the aggressive marketing of the drink, Coca-Cola was not much of a success. Before the war ended production of Coca-Cola in Denmark, total sales amounted to a meagre 2,155,264 bottles.Footnote 7
Coca-Cola Export Corporation, however, still had hopes for the Danish market. Shortly after the end of the war, the Danish solicitor Thorvald Mikkelsen, who had been Coca-Cola's Danish attorney since the late 1930s, met with representatives of the corporation in New York. After the meeting, Mikkelsen noted that the Americans ‘were extremely interested in Scandinavia and have decided to build up a strong market there’.Footnote 8 The relaunch of Coca-Cola proved to be difficult, however. This was due to the continuation of sugar rationing for several years after the war.Footnote 9 With limited sugar supplies, no Danish producer was interested in marketing a soft drink under licence where part of the profits had to be sent abroad. At the same time, it was evident that there was a potential market for Coca-Cola as can be seen from the fact that several small soft-drink producers used this situation as an opportunity to invent local cola drinks (such as Ritzy Cola, O'Cola and Happy Cola), and when it became evident that sugar rationing would soon end, the Danish beverage producers started to worry about the competition from Coca-Cola. Thus by 1951 ‘the Coca-Cola question’ was ‘haunting’ the members of the ‘Association of soft-drink producers on Funen’ according to the minutes from the annual general assembly.Footnote 10
Based on this, it is not a surprise that optimism ran high in the Coca-Cola Export Corporation when the end of sugar rationing was announced in 1953. In a letter to the president of the corporation, Jim Curtis, H. B. Nicholson wrote in March 1953 about rapid developments in the Scandinavian market and suggested that Copenhagen would be the best location for a new Scandinavian office. ‘Norway is not central’, he told his boss, and ‘Denmark is more receptive to foreign business men and establishments than Sweden’. Copenhagen was preferred although Denmark was the only Scandinavian country where Coca-Cola still was not on the market. Still, Nicholson was an optimist due to rumours that Danish breweries were planning to seek negotiations with Coca-Cola.Footnote 11 His optimism proved ill founded. It was not the Coca-Cola Company that Danish breweries contacted when sugar rationing came to an end. They turned to the Danish government.
The making of the cola tax
The Danish beverage industry was very well organised. Most soft drinks producers were also breweries and the industry was clearly dominated by the two giants, Tuborg and Carlsberg, who had co-operated closely since the early twentieth century. The two giants dominated not only the market but also the two interest organisations, the Danish Brewers Association and the Association of Danish Soft-Drink Producers.Footnote 12 Carlsberg and Tuborg also had close personal contact with leading political circles, especially the Conservative Party. Thus the former Minister of Trade (1940–3) Halfdan Hendriksen, between 1946 and 1953 combined his job as president for Carlsberg with being a Conservative member of parliament (1924–57) and chairman of the Conservative Party (1948–57), while the Minister of Trade (1950–3), the Conservative Aage Rytter, had close contact with the two breweries and later became president of Tuborg.Footnote 13 With close links such as these it is not surprising that the beverage industry turned to the political system for help when confronted with the American Coca-Cola Company. In November 1952 the Association of Danish Soft-Drink Producers wrote to the Minister of Finance, Torkild Kristensen. Their letter is a classic example of lobbying using easily transparent codes. The Association started out by telling him that several of its members were contemplating the production of cola drinks when sugar rationing ended. Therefore – and this is the key message – the association wished to know if the ministry had any plans regarding cola drinks. Was a ban as seen in ‘some countries’ under consideration? Or maybe a special tax, since the production of cola drinks under the current tax on soft drinks would probably result in a dramatic decline in beer consumption and therefore a decline in state revenue from the beer tax. To avoid losses for the Treasury, ‘a bottle containing 20 centilitres of cola drink would have to be taxed with 25 øre in order to lift the price to a level that would create a balance between the demand for cola drinks on the one hand and that for wine and beer on the other.’ Or did the minister plan to give cola drinks ‘unrestricted access to the Danish market, thus renouncing any attempt to stabilise either the Danish economy or the fiscal aspects of the state budget’?Footnote 14
The real agenda of the beverage producers is evident. They wanted legislation that made it impossible for the Coca-Cola Company (and other foreign cola drink producers such as the Pepsi-Cola Company) to become serious competitors in the Danish market. Their argument, focusing on both national industrial interests and the fiscal interests of the government, was positively received in the Ministry of Finance. Although evidence shows that the ministry considered a ban,Footnote 15 in the end it opted for a special tax on cola drinks. The proposal for this tax was introduced into a larger temporary law on excise taxes between the first and the second reading of the law in parliament.Footnote 16 Torkild Kristensen explained the tax by arguing that it had been demonstrated that cola drinks with their caffeine content (and ‘a rather strong stimulating effect’) were competing with both soft drinks and especially beers:
If these cola drinks gained popularity in our country, it would probably be detrimental to the sale of beer and therefore offer a problem not just for the breweries but also for the public finances, as beer sales are a substantial source of government income. Based on this, it will only be fair if these drinks competing with beer become subject to a relatively high level of taxation.Footnote 17
Thus Kristensen closely followed the argument outlined by the beverage industry. Although the suggested level of taxation at one krone per litre was lower that the 1.25 krones suggested by the industry, it was dramatically higher than the general soft-drink tax, which stood at 0.12 krones per litre. In parliament, an overwhelming majority – consisting of the government parties (Liberals and Conservatives) and of the dominant opposition parties (Social Democrats and Social Liberals) – supported the proposed tax package including the new cola drink tax, which became effective from 1 April 1953. The cola tax was only one small part of a comprehensive tax and duties reform and the only verbalised opposition to the cola tax came from the small pro-free-market Georgist party, Retsforbundet.Footnote 18 The party's spokesman criticised the tax for going against temperance interests as ‘coca-cola probably would be consumed instead of beer’.Footnote 19 These positions had not changed when the government – now a Social Democratic minority government – asked parliament to prolong the tax package in November 1953.Footnote 20
The special tax on cola drinks was prohibitive. Demand for cola drinks in Denmark all but disappeared. For the beverage industry the tax was an evident victory. The ‘cola question’ had been successfully solved from the perspective of Danish producers. In this, the Danish case differs from other European encounters with Coca-Cola. In the post-war years, local economic interests often failed to persuade governments to introduce protectionist measures against the feared invasion of the charismatic American soft drink, and France is the best-known example of this; however, campaigns against Coca-Cola failed in other European countries too, and in 1952 Sweden actually abolished a law banning phosphoric acid in food thus opening the Swedish market for Coca-Cola.Footnote 21 Another striking difference is that the Coca-Cola issue did not lead to any debates resembling the French outcry against Coca-Colonisation or Italian warnings against ‘Coca-Cholera’. In Denmark the communists, due to their general opposition to indirect taxation, actually ended up indirectly supporting Coca-Cola and American interests by voting against the cola tax twice in 1953.
There are several explanations for this. An important one is timing. In 1949, it was easy to link Coca-Cola to the Marshall Plan and the Atlantic Treaty – two key examples of growing American influence in early Cold War Europe. In Denmark, sugar rationing meant that Coca-Cola only became an issue in 1953 when the alliance with the United States was a well-established fact. A second reason is the weak position of Danish communists. It is hard to see how they could have launched a campaign against Coca-Cola as an example of American imperialism in the early 1950s. Instead, they argued in mainly domestic terms against indirect taxation as socially unfair. Third, while the communists would not, at least on their own, have been strong enough to mount a strong campaign, the beverage industry certainly was. This was exactly what they did by contacting the government in 1952. As this strategy was successful there was no need for a public campaign. Finally, and most importantly, there was little room for an anti-American Coca-Cola campaign in Denmark as all major parties supported the cola tax and furthermore framed it as a purely fiscal issue. Coca-Cola was subject to taxation not because it was American or because it was unhealthy but because it was bad for the state budget and influential Danish business interests. A central element in this strategy was that the tax was a general tax against all cola drinks. The government carefully avoided the brand name of Coca-Cola when the tax was introduced.
Fighting the cola tax
While the introduction of the cola tax did not create a great stir either in parliament or in the media, representatives of the Coca-Cola Company quickly started protesting against the tax that they systematically referred to as ‘the Coca-Cola Tax’. Shortly after the passing of the law, Coca-Cola Company's Danish lawyer characterised the law in a letter to the Ministry of Finance as a tax on an American product and thus an infringement of GATT (General Agreement on Tariffs and Trade) regulations. However, the ministry rejected this interpretation, pointing out that all drinks containing cola, including Danish ones, were subject to the tax. This was not a matter of trade discrimination, and ‘cola’ was ‘simply a botanical term’.Footnote 22 However, Coca-Cola and its Danish partners did give up the struggle against the tax.
In early 1954, the Coca-Cola Export Corporation asked for a meeting with the State Department to discuss ‘the Danish discriminatory tax on Coca-Cola’. In a letter to the State Department prior to the meeting that took place in February, Michael Deane from the corporation detailed the arguments of Coca-Cola. He pointed out that as a source of revenue the tax so far had been a fiasco and would continue to be so ‘as long as this discriminatory tax prevents the bottling of Coca-Cola in Denmark’. Deane debunked the key argument that sales of Coca-Cola ‘could adversely affect the revenue derived from the tax on the sale of beer’ as ‘surveys taken in Europe indicate that Coca-Cola is no threat to beer sales’. Accordingly Coca-Cola asked the State Department to make a formal complaint against the tax to the Danish government.Footnote 23
The State Department accepted Coca-Cola's arguments and the direct result of the meeting was a formal note from the American Embassy in Copenhagen to the Danish government. However, the Danish Ministry of Finance stuck to its guns and told the American Embassy that the tax could not be considered discriminatory, as Danish products were also subject to the tax. Over the next years the American Embassy, Coca-Cola's Danish attorney, and the company DADEKO that had signed a contract to bottle Coca-Cola in eastern Denmark, all raised the issue of the tax with the Danish authorities several times but to no avail. An internal note from the Ministry of Finance's Office of Customs and Excise Duties in February 1955 neatly summarised the official rationale for the tax but also more than hinted that the beverage industry held something very close to a right of veto in all discussions concerning the cola tax:
The tax on products containing cola was introduced because it was believed that a strongly advertised Coca-Cola drink would be a serious competitor to Danish beer and thus detrimental to government revenue from the beer tax. . .. The Office [of customs and excise taxes] has received no information that the Danish beer industry has changed its position on this matter.Footnote 24
Within the Danish government the Ministry of Foreign Affairs was the only sceptical voice arguing that the cola tax was not only in conflict with international trade agreements but also might harm Danish agricultural export interests.Footnote 25 However, such claims were put aside by the Ministry of Finance and there are no signs that such worries entered the parliamentary scene in the first years following the introduction of the tax. In the early 1950s concerns about the state budget had priority over international trade agreements. From the mid-1950s this began to change. Growing Danish exports underlined the importance of international regulation of trade and tariffs.Footnote 26 Especially agricultural interests became concerned because the traditional dominant export market, Britain, could not absorb a growing Danish production and the industry started to look for new markets, including the United States.Footnote 27 In parliament the Liberal Party defended agricultural interests, arguing in favour of free trade, whereas the Conservatives with traditional close relations with industry were more reluctant and defended protectionist policies until the late 1950s. For the Social Democrats economic growth and high employment were the main concerns, as a generation of academically trained economists took over leading positions in the party exports, and international trade became an increasingly important issue.Footnote 28 This general shift in Danish trade policy orientation also came to influence the discussion on the cola tax.
The first signs that the situation was about to change came in a parliamentary debate on excise tax legislation in February 1957. Although the cola tax was not up for discussion, the issue was introduced by the spokesman for the Liberal Party, now the major party of the opposition to the Social Democratic government. He said:
We have been approached by the people who produce the non-alcoholic drink called Coca-Cola. This drink is taxed by 1 krone per litre compared to the taxation of 20 øre per litre for other non-alcoholic drinks that are comparable to Coca-Cola. We find that this tax is very high and suggest that the standing committee on customs looks into whether it can be lowered somewhat between the second and the third reading of the law.Footnote 29
This is the first evidence we have of a positive effect of the lobbying of the Coca-Cola interests. When the parliamentary committee was debating the proposed legislation in detail, Coca-Cola's Danish business partner DADEKO was given the opportunity to present its arguments to the main political parties. There were two basic arguments. First, the introduction of Coca-Cola would not have an adverse effect on the balance of payments, as expenditure on the Coca-Cola syrup to be bought in the USA was negligible and DADEKO's production would be based on ‘machinery, bottles, cases and sugar produced in Denmark’. Instead, ‘this new business venture will, in general, generate new employment’. DADEKO further reiterated the argument that evidence from other European countries demonstrated that fears that Coca-Cola would crowd out beer were unfounded.Footnote 30
The intervention of the Liberal Party in favour of Coca-Cola did not lead to the immediate abolition of the tax. However, the work of the standing committee was a decisive turning point as it showed that only a small parliamentary majority, consisting of the Social Democrats and the Conservatives, supported the current tax, while both the Liberals and the Social Liberals argued for a reduction of the tax. Thus the pro-tax alliance was breaking down. This has to be understood in the light of the broader debate on Danish trade policies discussed above. The Liberals defended agricultural export interests and the Conservatives were speaking for industrial interests in favour of protected home markets. The Social Democrats were caught in the middle but in the short term defended the tax. The matter now also caught media interest. In an editorial, the important Social Liberal newspaper Politiken argued against the tax, labelling it ‘a despicable piece of protectionist policy’, and the business-friendly Børsen reported on the opposition of the temperance movement to the high taxation of cola drinks.Footnote 31
The Coca-Cola Export Corporation evidently monitored Danish developments closely and intensified its campaign against the cola tax. In April 1957 two high-ranking representatives of Coca-Cola arrived in Copenhagen, and in an interview in a popular newspaper, Alexander Makinsky – who had been the company's front-line man in the French ‘Coca-Cola War’ seven years earlierFootnote 32 – explained the issue from the perspective of Coca-Cola. According to Makinsky,
This is a strange story. Denmark and Portugal are the only two countries in the world outside the Iron Curtain where you cannot get Coca-Cola, and I have to admit that we do not really understand why Coca-Cola in Denmark is taxed with 1 krone per litre.
Asked whether Coca-Cola had experienced problems elsewhere, Makinsky responded:
There have been difficulties but they have been overcome . . . Where resistance has existed, there have been two causes. First, the old story that cola content in the beverage can be harmful. This is pure nonsense . . . Another and more interesting hindrance has been the fact that Coca-Cola in many countries has been a symbol of and synonymous with the concept of the USA. Naturally, this is flattering for us – but it has also, in some places, created difficulties because opponents of the USA did not want the ‘American drink’ allowed. Well, now it is only behind the Iron Curtain that the opposition exists.Footnote 33
While the issue had thus far been interpreted in Denmark in purely economic terms, Makinsky introduced the Cold War politics that had been a crucial element in the battle over Coca-Cola in countries such as France. In his analysis, the cola tax put Denmark well beyond the pale of Western democracies in Europe, comparing it to authoritarian Portugal and the communist bloc.
In the final reading of the law in parliament, the cola tax was passed once again. However, the debate demonstrated that it was under strong pressure. The Liberal Party reiterated the arguments of the Coca-Cola interests, while the Social Liberals echoed the position put forward in Politiken. Adding to this, the party's spokesman pointed to what he considered a main explanation for the tax, ‘the fact of the matter is that breweries in Denmark always have had considerable political clout, and this is demonstrably still the case’. This provoked a rejoinder from the Social Democrats that ‘if the tax was reduced we will let another capitalist interest into the country, one that is much stronger than the Danish beer capital’. The Social Democrats also issued stern warnings that Coca-Cola Company did business very differently from Danish producers, with massive marketing campaigns ‘well beyond the capabilities of our small provincial producers, and if the large breweries have to take up competition using the same methods I'm afraid that we will soon see a demand for tax reductions . . . This is why we cannot accept a reduction of the tax.’Footnote 34
Thus the cat was out of the bag. The tax was not just a fiscal issue but a clear protectionist measure in favour of the Danish beverage industry, shielding it from aggressive American competition. This was also the conclusion reached by many newspapers. While Social Democrat and Conservative newspapers played down the debate by referring to it as ‘entertaining’, the headline in the populist Ekstra Bladet was ‘victory for Beer in the Folketing [the Danish parliament]’.Footnote 35
In the short term Coca-Cola's offensive was unsuccessful. However, the debate on the tax was clearly gaining momentum and was to some extent driven by ideological views on protection versus free trade, as well as a critique of the strong political influence of the Danish breweries. At the same time the issue of the tax was contained in a local, national framework. It is telling that the only actor to introduce the broader context of the Cold War and (potential) Anti-Americanism was the Coca-Cola Company, through its representatives.
The demise of the cola tax
As pressure on the cola tax grew over the next year both in parliament and in the press, the beverage industry became worried. In April 1958 Einar Dessau, president of Tuborg and chairman of the Association of Danish Soft-Drink Producers, wrote the Minister of Finance. Due to rumours of a reduction of the tax he wanted to explain the whole cola issue from the perspective of the industry. He restated the industry's arguments about the fiscal and industrial problems posed by Coca-Cola but also added new ones. The aggressive sales methods of Coca-Cola would be copied by Danish producers, leading to more expensive products for the consumers. Furthermore, Coca-Cola was a threat to the traditional non-alcoholic Danish malt beer (hvidtøl) and ‘we find it wrong that the position of malt beer in the market would be partly taken over by beverages foreign to a Danish mentality’.Footnote 36 A parallel argument is found in a letter, dated two weeks earlier, stating that ‘the industry does not want to crowd out the more natural soft drinks that Danish consumers evidently like with the foreign cola drinks’. Thus, a cultural or even identity argument was added to the economic ones. The growing support for Coca-Cola among politicians and in the press was explained as ‘the result of an aggressive and biased propaganda launched by a large foreign company seeking monopoly status’, and it was stressed that the business methods of Coca-Cola were aggressive and un-Danish, through reference to intensive and ‘very American’ marketing. Even worse,
using a plethora of methods, the company has tried to do something completely unheard of, that is forcing the Danish government to reduce a domestic tax on certain stimulating soft drinks, and political allies [of the company] have hinted at the risk of problems for the import of Danish agricultural products in America if the company's demands were not accepted.Footnote 37
It is rather ironic to see a representative of the duopoly of Carlsberg and Tuborg complaining about a ‘monopoly seeking’ company. But the key factor is, of course, that the company was foreign. In their new line of argument the Danish breweries and soft-drink producers clearly presented Coca-Coca as an alien entity, making the most of the foreignness of both the company and the drink itself. They also stressed that the Coca-Cola Company was ‘large’ and thus indirectly linked their argument to a constituent element in Danish national identity: that Denmark is a small nation besieged by large and powerful neighbours. By contrasting Coca-Cola to ‘more natural’ Danish soft drinks, they even labelled the drink as unnatural.
During the 1950s Danish industry had gradually come to play a more important role as exporter of goods and in 1958/9 industrial exports for the first time outgrew agricultural exports.Footnote 38 Consequently, the Social Democratic government put emphasis on international free trade and trade agreements. This was clearly demonstrated by the Danish participation in the negotiations establishing a free trade region with other OEEC countries.Footnote 39 In this context the final stage in the protracted battle about the cola tax was fought in late 1958.
When the laws on excise taxes had to be revised as part of a new customs law, the Liberals persuaded the Minister of Finance, Viggo Kampmann, that the cola tax was one of the topics that the standing committee for customs could consider.Footnote 40 In the committee, a majority agreed to propose that all soft drinks should be taxed at 20 øre per litre – which would mean dropping the special tax on cola drinks.
The Danish breweries and soft-drink producers did not admit defeat easily. Instead they publicly promised that they would produce a cola drink and make it available nationwide by April 1959 if ‘the existing tax on cola drinks is upheld’.Footnote 41 It was a peculiar offer. With existing tax levels, a bottle of cola drink could cost approximately 50% more than other soft drinks. This was clearly a prohibitive price, as demonstrated by the very low revenue – ca. DKr 10,000 – produced by the cola tax annually.Footnote 42 What the beverage industry was promising was to establish a production bound to generate losses, and the proposal is highly telling of the industry's fear of Coca-Cola.
In the light of the erosion of support for the tax, the proposal appears to be a desperate rearguard action. The Coca-Cola Company, however, took it seriously and sent representatives to Copenhagen once more. They contacted the American ambassador, Val Peterson, and asked him to discuss the issue with the Danish government. In early December, Peterson met with Foreign Minister Jens Otto Krag and Viggo Kampmann. Both assured him that the breweries’ latest offensive would fail.Footnote 43 They were right. The second and third reading of the law in parliament demonstrated that a solid majority consisting of the Social Democrats and the well-established opponents of the tax (the Liberal Party, the Social Liberals and the Georgists) was in favour of reducing the tax on cola drinks to the same level as that on other soft drinks. This left a strange alliance of the Conservatives who opposed the elimination of the tax and the communists who finally spoke out against American ‘monopoly capital’ and the ‘sour liquid’ that they claimed to be a health risk.Footnote 44
Analysed from a comparative perspective, it is striking that the Danish special tax on cola drinks which effectively blocked the Danish market for Coca-Cola was introduced when similar attempts had failed as in France or was dismantled as in Sweden. It is even more interesting that the symbolic status of Coca-Cola as an icon for the American way of life (and American economic and political power) played a completely marginal role in Danish debates. Only the Coca-Cola Company stressed this aspect, which had been crucial in debates in France, Italy and elsewhere. The Cold War never set the framework for the debates and, tellingly, the communists voted against the tax in 1953. When they changed their tune in 1958, the anti-American tenor of their arguments was weak. Instead, their main objective in the parliamentary debates in 1958 was to taunt the Social Democrats for having changed their position on the issue. In many ways, the history of the tax is best understood as an example of successful business lobbying, first by the Danish beverage industry, then by the Coca-Cola Company. While the Danish breweries and soft-drink producers in 1952 simply used the industry's excellent connections to the political system, the Coca-Cola Company not only tried to argue their case directly to the government but also made use of the American government and of their Danish business partners’ contacts with Danish political parties and with the press. These lobbying efforts were crowned by success in late 1958.
However, to understand the fall of the cola tax, we need to look at some broader contexts. First, one of the recurring arguments in favour of the tax – that the introduction of Coca-Cola would be a problem for the balance of payments and widen the problematic dollar gap for Denmark – lost force. This was not so much because the Coca-Cola interests convincingly argued that dollar costs would be small but more importantly because of the international liberalisation of currency regulations in the late 1950s. Second, it is hardly an accident that the opposition to the tax gathered strength at a time when European economic integration and free trade initiatives dominated the economic policy agenda. Although Denmark was not a signatory power to the Rome Treaty in 1957, many in Denmark were in favour of Danish membership, including the Liberal Party.Footnote 45 This explains why the Liberals (who actually introduced the tax in 1953) changed their position after 1957. That opposition to the tax could be linked to a more general opposition to market regulation was also important for a party traditionally closely associated with a liberalist ideology – as comments in the liberal press demonstrate. This analysis is also valid for the Social Liberals who also changed their position on the tax from 1957. Third, the pro-tax coalition was undermined by the fact that Denmark from May 1957 was governed by a coalition dominated by the Social Democrats but including the Social Liberals and the Georgists Party who were in favour of lifting the tax.Footnote 46 Fourth, the Social Democrats also became more reluctant as the party came to view export and trade as an important element in its strategy for modernising the Danish economy and building up the welfare state.Footnote 47 This was stated by Minister of Finance Viggo Kampmann in his December 1958 meeting with Val Peterson, when Kampmann distanced himself from the tax stating that ‘the tax was not one he had introduced’.Footnote 48 This was rather disingenuous as he had defended the tax on several occasions since becoming Minister of Finance in 1953. It might be that the Social Democrats were succumbing to the continued campaign by the Coca-Cola Company or even had been convinced by their basic argument that the tax did not make economic sense. But more importantly the governing party started linking the issue to the trend towards trade liberalisation and anti-protectionism. Due to the successful campaigning of Coca-Cola and its Danish partners the cola tax had become a symbol of national protectionism that did not fit well with the new expansionist economic policy that the government introduced in 1957.Footnote 49 Central to this was the attempt to stimulate industrial development through foreign investments. That meant primarily American investments, and in the 1957 pamphlet Investment of Foreign Capital in Denmark the government claimed that ‘American citizens can do business on equal terms with Danish citizens’.Footnote 50 The whole issue of the cola tax could be seen as a contradiction of that statement.
The cola war
When parliament voted to abolish the special cola tax in December 1958, the Danish producers earned a small concession. The tax would remain in force for the first six months of 1959, giving Danish breweries and soft-drink producers some time to come up with strategies for facing the new competition. The industry made the most of this concession. In November 1958 the association of soft-drink producers had established a special ‘cola committee’ with the brief of looking into the possibilities for the joint production of a Danish cola drink ‘if the cola tax was reduced to less than 60 øre per litre’.Footnote 51 For this purpose the committee met with representatives from the Swedish and Norwegian industries in the middle of December. In both countries there had been attempts to launch national brands but they had failed. The president of the Norwegian Nora breweries even reported that the massive marketing campaign for the local Isi-Cola ended up benefiting the American brands. Based on such dispiriting information, the committee engaged in negotiations with Coca-Cola's main competitor, the Pepsi-Cola Company. These negotiations broke down in January, however, as the Americans doubted whether the Danes would commit themselves wholeheartedly to the successful launch of Pepsi-Cola.
This was a valid analysis. A dominant theme running through the debates of the ‘cola committee’ was that while the Danish producers did not want to leave the field to Coca-Cola they also wanted to come up with a strategy that would create as little buzz (and publicity) about cola drinks as possible. The industry clearly was thinking of the issue as a zero sum game. Vice-president Rytter from the Tuborg Brewery expressed the dominant opinion when he stated that ‘a Danish cola drink would enable us to keep sales at a low level which will be the best solution for the breweries’.Footnote 52
This mental framework changed dramatically after the break-down of the negotiations with Pepsi-Cola. In a meeting on 13 January 1959 the committee agreed to launch a Danish cola drink, and two weeks later detailed plans for the establishment of a new company, A/S [limited liability company] Dansk Coladrik, jointly owned by the eighteen largest breweries and soft-drink producers, were discussed. The envisaged construction was a clear copy of the Coca-Cola set-up with a central firm producing syrup, controlling quality and marketing strategies, while the firms involved would serve as bottlers. Copying included producing a syrup that achieved a taste as close to Coca-Cola as possible, and even the first suggested name for the Danish cola, O-la Cola was based on an argument that this was as close as one could get to Coca-Cola and still win a lawsuit about brand infringement. President Einar Dessau from Tuborg opposed this reasoning, however, arguing ‘that even if a law suit could be won, it would be something that Coca-Cola could use in their marketing and thus still be an advantage for the Americans’. Instead, the committee settled on the brand name Jolly Cola, and Dansk Coladrik was formally established 17 April 1959.
The decision to market a Danish cola brand also marked a decisive shift in another sense. From the discussions of the board of Dansk Coladrik it is clear that the Danish producers left behind their pessimistic analyses – rooted in an understanding of the soft-drink and beer market as being inflexible – and embraced the (American) credo of mass consumerism. The ambition now was to sell as many Danish cola drinks as possible. This is evident from the marketing strategy of Dansk Coladrik, which was clearly inspired by the ‘intensive and American’ sales methods the Danish producers had bemoaned when they argued in favour of the cola tax. The advertising firm Eberlin designed a brand logo for Jolly Cola and came up with advertisements linking Jolly Cola to youthfulness and leisure, and catchy slogans such as ‘for it's a jolly good cola’ – in English and clearly referring to the traditional song that most Danes had learned in their English classes in school. It is telling that there are no references to Jolly Cola as the genuinely Danish cola in the advertisement material. Instead, the first visual advertisement depicted a group of young people enjoying life on lawn of a large suburban villa that would fit much better in the United States than in Denmark of the late 1950s.Footnote 53 However, the main marketing ploy was to present Jolly Cola as ‘the large cola’. This highlighted the fact that Jolly Cola was marketed in the standard Danish soft-drink bottles containing 25 centilitres as opposed to the 6 oz. (or 19 cl.) Coca-Cola bottles – and sold at the same price. It is hardly a coincidence that this echoes back to one of Pepsi-Cola's most successful slogans – ‘the full 12 ounces’ – in its struggle against Coca-Cola in the American market.Footnote 54
Using the standard bottle was also framed as a service to the retailers, where the argument fell on sympathetic ears. In June 1959 the trade magazine of the general retailers encouraged members to buy the Danish cola in order to avoid ‘the plague of rifled bottles’.Footnote 55 The support of the retailers was of crucial importance for the success of the Jolly Cola, as this was the precondition for the drink being available ‘here, there and everywhere’ (‘her, der og allevegne’) – to quote another of the launching slogans.
Availability was a problem for Coca-Cola. DADEKO had prepared for production for a long time and opened a bottling plant in June 1959 with a production capacity of 70,000 bottles a day.Footnote 56 However, DADEKO only held the bottling rights to the eastern part of Denmark (including Copenhagen). The rights for western Denmark were held by the Aarhus firm of Wilian & Madsen who had no production capacity until well into 1960.Footnote 57 This meant that Coca-Cola was available only in the Copenhagen area when the tax was finally lifted on 1 July 1959. As the newspaper Dagens Nyheder reported, ‘the Cola War will not hit Funen and Jutland’.Footnote 58
With these reservations, 1 July was still ‘the Big Coca-Cola Day’, according to Coca-Cola, that was launched at a well-advertised event in Copenhagen hosted by the Danish sales president, former professional footballer John Hansen, who was one of Denmark's most beloved sport stars.Footnote 59 The press was mobilised and reported on the ‘war’ in generally favourable terms – except, as one might expect, the communist daily that characterised Coca-Cola as ‘the American cocaine drink’.Footnote 60
Sales of cola drinks in July 1959 exceeded all expectations. According to the newspaper Aktuelt, sales of Coca-Cola at about 5 million bottles were three times higher than expected.Footnote 61 More than 9 million bottles of Jolly Cola were sold. These figures must be compared to an annual sale of 40–50,000 bottles in the years of the special cola tax. Worries that cola drinks would crowd out other products were proved wrong. Sales of beer and other soft drinks remained stable while the Minister of Finance could report that revenue from the soft-drink tax for July 1959 exceeded that of the same month in 1958 by 48%. According to estimates from Dansk Coladrik, 22% of total soft-drink sales consisted of cola drinks.Footnote 62
Over the following months sales of Jolly Cola declined, but a year later Dansk Coladrik reported that annual sales had been an impressive 63.5 million bottles – or 10% to 12% of total soft-drink sales. This was more than Coca-Cola, which can in part be explained by the fact that Wilian & Madsen only started production at their new bottling plant in 1960. Dansk Coladrik monitored the market closely and concluded in a number of analyses from spring and summer in 1960 that the sale of Jolly Cola did decline in a region when Coca-Cola became available, but only marginally.Footnote 63 In the first half of the 1960s, sales of Jolly Cola were approximately 50 million bottles annually.Footnote 64 Sales figures for Coca-Cola are not available but the capacities of the two bottling plants suggest similar numbers. From the mid-1960s sales of cola drinks grew steadily but so did that of other soft drinks and the market share of cola drinks was about 20%. According economic historian Hans Christian Johansen, market shares were relatively stable over the next twenty years, with Coca-Cola having about half the market, Jolly Cola 40%, while the remaining sales were split between brands launched by small independent producers.Footnote 65
From the late 1980s things began to change, with Jolly Cola sales plummeting. Today, the Danish cola drink market is completely dominated by the two American giants, Coca-Cola and Pepsi-Cola (introduced into Denmark in 1970). However, it was no mean feat for the Danish producers to be able to compete successfully with the world's most famous brand for 25–30 years.
In a comparative perspective, the success of Jolly Cola is also striking. Local cola brands were (and are) a well-known phenomenon all over Europe. At the very best, these brands managed to establish themselves as marginal niche products when they faced the competition from Coca-Cola (and Pepsi-Cola).Footnote 66 The most important explanation for the success of the local Danish cola brand is probably that it was produced as a joint venture by an extremely well-organised beverage industry while Coca-Cola Company's Danish bottlers were newcomers to the market. Dansk Coladrik had the advantage of the industry's highly developed infrastructure, including long-standing contacts with a network of distributors and retailers that covered every city, village and hamlet of Denmark – while Coca-Cola only became available nationwide during 1960. This fact probably meant that the media hype around the launching of the cola war in 1959 benefited the Danish cola. Jolly Cola also benefited from distribution agreements securing the established beverage industry a monopoly position in important niche markets such as bars, dance halls and sport arenas, important venues especially for teenagers and young adults, who were the primary consumers of cola drinks.Footnote 67
Local market knowledge helped marketing campaigns. Stressing that Jolly Cola was ‘the big cola’ offering more for the same money was an important argument at a time when the era of high economic growth in Denmark was still in its early phase.Footnote 68 A combination of local market knowledge and an understanding of market segmentation explain why Jolly Cola advertisements from the 1960s in general catered for younger teenage consumers while Coca-Cola focused on broader consumer groups, having only one product to market, whereas the producers of Jolly Cola also supplied the Danes with beers. The ambition was to link Jolly Cola closely to the age-group that felt that they had left childhood behind while their beer-drinking days were still well ahead of them.Footnote 69 What must be stressed, however, is that national themes never made their way into the Jolly Cola advertisements, while the Coca-Cola campaigns for their part never made explicit use of American references. In the market place, the Danish cola war was a war waged in cola language.
Resisting the ‘irresistible empire’?
The Danish encounter with Coca-Cola in the first two post-war decades fell into three distinct phases. In the initial post-war years, sugar rationing meant that the Coca-Cola Company did not try to enter the Danish market. When sugar rationing was lifted in 1953, the introduction of a prohibitive tax on cola drinks undermined the market completely. Coca-Cola Company and their allies protested repeatedly against this tax and eventually the tax was rescinded in 1959, opening the third phase of the very slow Coca-Colonisation of Denmark. When Coca-Cola was marketed from 1 July 1959 it confronted a strong local player in the Jolly Cola brand produced by an alliance of the largest breweries and soft-drink producers. This local brand managed to hold on to a market share of some 40% well into the 1980s, thus keeping Coca-Cola at least partly at bay in the Danish soft-drink market. In a comparative, Western European perspective, Denmark offers an exception as Coca-Cola's local opponents managed first to block access to the Danish market and then to compete successfully with the American original for several decades.
In comparison to the well-researched French case of the battle between local interests and the Coca-Cola Company, ideology was almost absent in Denmark. It was Coca-Cola's Alexander Makinsky who first introduced an ideological Cold War and anti-American reading into the conflict in 1957. Sugar rationing meant that the availability of the iconic American soft drink simply was not an issue in Denmark when the term Coca-Colonisation was coined as short hand for American political and economic imperialism in the late 1940s. There were naturally also strong voices critical of the USA in Denmark, as demonstrated for example in the criticism of McCarthyism not only communists, but also from Social Democrats, Social Liberals and many Liberals.Footnote 70 However, Coca-Cola had not gained the status of being a strong symbol for everything American in Denmark. This is clear from the introduction of the cola tax. Although this tax was clearly protectionist and clearly a Coca-Cola (and maybe also Pepsi-Cola) tax, anti-American arguments played no role in framing the pro-tax arguments in 1953 and well beyond. It was argued in strictly economic terms – those of fiscal revenue, protectionism and trade discrimination. Only when the tax came under pressure did the pro-tax alliance politicise the issue, suggesting an alien character in Coca-Cola: unnatural, American and un-Danish. This anti-American line of arguments did not, however, have any impact on the decision-makers in government and parliament.
As we argued in the introduction, the tale of Coca-Cola Company's difficulties in Denmark does not fit well with the narrative of American consumer capitalism as an ‘irresistible empire’ conquering European markets from the 1920s that Victoria de Grazia has offered. As we have documented, resistance and lobbyism from the well-organised Danish beverage industry managed to block the entry of Coca-Cola in Denmark until 1959. However, it must also be acknowledged that the market empire, represented by the Coca-Cola Company, was setting the agenda. It was the consumer-oriented capitalism that corporate Danish capitalism, embodied by the beverage industry, felt threatened by and fought against tooth and nail. For them ‘Americanism’ was an economic and political threat to established Danish business interests. In this struggle, breweries and soft-drink producers demonstrated that they were a formidable force, able successfully to use their political connections to secure the introduction of a cola tax blocking the advance of ‘the irresistible empire’, at least in the Danish soft-drink market.
This victory of the beverage industry was only temporary. From 1954 the Coca-Cola Company mobilised the American government against the Danish tax. The Danish breweries were not the only party with good political contacts. However, it does seem that neither the interventions of the American government nor those of Coca-Cola's Danish business partners had any direct impact on the Danish government in the mid-1950s. At the same time it is clear that this escalation of the conflict made the defence of the cola tax more difficult in the longer run. DADEKO, Coca-Cola's Danish partner, was more successful in lobbying opposition parties and the Danish media from 1957, but this hardly explains why the political cola tax alliance collapsed during 1958. A much more plausible explanation is the changing economic environment, with the need for foreign investments entering the political agenda in Denmark, and the renewed focus on free trade and economic liberalisation in the wake of the Treaty of Rome.
This takes us to the third and most fascinating phase of the story, when the beverage industry, which until 1959 can be characterised as anti-Americanisers who stubbornly fought the entry of American cola interests into the Danish market, launched Jolly Cola as their plan B. This saw the industry metamorphosing into Americanisers, as the business model for Dansk Coladrik and Jolly Cola itself were evident examples of copycatting American originals.Footnote 71 The industry did not just copy the drink and the business model. It also fully embraced mass consumerism, American style, when planning the launch of Jolly Cola.
To put it into the framework of de Grazia's analysis, the industry's key protagonists had come to the conclusion that the market empire was, indeed, irresistible. The only way to resist it was copying it. This way the Danish beverage industry started practising the message that would win Jean-Jacques Servan-Schreiber international fame when he preached it some years later in his 1967 bestseller, Le défi américain (The American Challenge). In doing so, the beverage industry became an agent in the self-Americanisation of Denmark – in line with local producers of chewing gum, candy bars, nylon stockings and of Danish jazz and rock‘n’roll music, to mention a few examples.
