Dive Brief:
- Investor Bill Ackman recently criticized Berkshire Hathaway's investment in Coca-Cola, saying the soda company has "caused enormous damage to society." Coca-Cola is one of the biggest and long-standing investments in Berkshire's portfolio.
- The spat began after Berkshire's vice chairman Charlie Munger commented on Valeant Pharmaceuticals' strategy of acquiring drugs and increasing their prices, calling the practice "deeply immoral." Valeant is one of Ackman's most prominent investments.
- "Coca-Cola has probably done more to create obesity and diabetes on a global basis than any other company in the world," Ackman, who believes "sugar is poison" said at the Berkshire Hathaway 50th Anniversary Symposium in New York.
Dive Insight:
"Coke defended its products, saying it sells more than 200 low- and no-calorie drinks in North America, including bottled water. Soft drink makers like Coke also say it’s unfair to single out soda and other sugary drinks for causing obesity and other health problems," The Wall Street Journal reported.
"These comments are irresponsible and do not recognize the current breadth of our business," according to a Coca-Cola spokesman.
Ackman's adversity to sugar only goes so far. While he calls Coca-Cola "a company that I wouldn’t own," his company Pershing Square recently acquired a $5.5 billion stake in Mondelez International, which includes brands like Oreo, Chips Ahoy, and Sour Patch candy. The firm said the company met two key criteria for a solid investment: cost-cutting opportunities and being a possible takeover target.
"Everything in moderation," Ackman said. "It’s complicated."
"[Ackman] pointed out that Mondelez products such as cookies and candy bars can be treats after a healthy meal, not outright replacements as Coke products can be for water," according to The Wall Street Journal.