×

CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S MARIA BARTIROMO SITS DOWN WITH MUHTAR KENT, COCA-COLA PRESIDENT & CEO, TODAY ON "CLOSING BELL WITH MARIA BARTIROMO"

MARIA BARTIROMO: I'M JOINED BY MUHTAR KENT, PRESIDENT AND CEO OF COCA-COLA. WELCOME BACK, MUHTAR. NICE TO SEE YOU AGAIN. I UNDERSTAND YOU'RE IN TOWN SPEAKING AT THIS WORLD FUND GALA TO RAISE MONEY FOR LATIN AMERICAN CHILDREN'S EDUCATION. WHY ARE YOU SPEAKING THERE, TELL US ABOUT THE CAUSE.

MUHTAR KENT: IT'S AN INITIATIVE WE HAVE WITH OUR YOUR LATIN AMERICA PARTNER FEMSA. AND IT'S AN INITIATIVE WE'VE HAD FOR A NUMBER OF YEARS TO PROMOTE EDUCATION TO PROMOTE CAPABILITY TO ENSURE THAT MORE PEOPLE PARTICIPATE IN THE GROWTH ECONOMIES OF LATIN AMERICA.

BARTIROMO: WELL, IT, CERTAINLY IS A PRIORITY AND IT IS HOPEFULLY, INCREASING A PRIORITY IN THIS COUNTRY, AS WELL. TO BUSINESS, CAN YOU GIVE US A SENSE WHERE WE ARE IN THIS SLOWDOWN BASED ON WHERE YOU SIT? HOW IS COCA-COLA DEALING WITH THIS RECESSION AND WHAT ARE YOU SEEING IN TERMS OF GROWTH AND WEAK SPOTS?

KENT: NOT ONE SIZE FITS ALL. SO IT'S JUST TO GIVE YOU AN EXAMPLE, INDIANS CONSUMERS ARE NOT REALLY PARTICIPATING IN THIS CRISIS. THINGS ARE -- WE SEE A VERY DYNAMIC ENVIRONMENT IN OTHER PARTS OF ASIA. I THINK THE STIMULUS PACKAGE IN CHINA IS REALLY BEGINNING TO SHOW. THERE ARE PARTS OF ASIA LIKE THE PHILIPPINES NOT SO GOOD. INDONESIA DOING FINE. LATIN AMERICA, MEXICO IS A LITTLE MORE AFFECTED BUT OTHER PARTS AND BRAZIL IS STILL DOING FINE. EUROPE, IT'S ONE WHERE EAST AND WEST, BOTH BAD.

BARTIROMO: YEAH.

KENT: I STILL DON'T BELIEVE THAT FINALLY THE AMERICAN CONSUMER IS GOING TO PULL THE WORLD OUT OF THIS CURRENT ECONOMIC STALEMATE.

BARTIROMO: YEAH, MR. SCHROEDER, THE FORMER CHANCELLOR OF GERMANY SAID TO ME WHEN I WAS IN RUSSIA, IF ANYBODY THINKS THIS RECESSION IS ENDING THIS YEAR, THEY'RE FLAT OUT WRONG BECAUSE WE HAVE A VERY TOUGH TWO YEARS AHEAD OF US IN EUROPE.THAT'S ONE OF THE WEAK SPOTS, EUROPE. YOU MENTIONED A LOT OF BRIGHT SPOTS, CHINA, INDIA, PLACES THAT ARE GOING TO CONTRIBUTE TO YOUR EXPANSION AND GROWTH.

KENT: WITHOUT QUESTION. BUT DESPITE DIFFICULT GEOGRAPHIES LIKE EUROPE, I ALSO AM CONSIDER MYSELF VERY LUCKY TO BE IN THE BUSINESS THAT WE ARE IN WHICH IS ESSENTIALLY SELLING MOMENTS OF PLEASURE BILLIONS OF TIMES EVERY DAY AND IN THAT RESPECT, WE STILL SEE BRIGHT SPOTS EVEN IN AREAS WHICH ARE ECONOMICALLY DEPRESSED.

BARTIROMO: LET ME ASK YOU ABOUT PRICING BECAUSE SOME COKE BOTTLERS, AS YOU KNOW, HAVE LOCKED IN CONCENTRATE PRICES FOR TEN YEARS LIKE FEMSA, FOR EXAMPLE. DOES THAT MAKE IT TOUGHER FOR YOU TO ADJUST PRICING WHEN IN FACT, THE ECONOMY DOES COME BACK? DO YOU NEED THAT WIGGLE ROOM?

KENT: I THINK, YOU KNOW, OUR PRICING WITH OUR BOTTLERS IS ONE WHICH IS ABSOLUTELY A VERY FAIR MECHANISM WHERE WHEN THE BOTTLER IS ABLE TO EXTRACT VALUE OUT OF THE MARKET THROUGH PRICING, THROUGH MIX MANAGEMENT, PACKAGING INITIATIVES, PRODUCT INITIATIVES, INNOVATION WE SHARE IN THAT EXTRACTION OF VALUE EQUITABLY. VERY EQUITABLY. WHEN THERE'S INVESTMENTS, WE INVEST TOGETHER AND WHEN THERE IS VALUE TO BE CREATED WE TAKE THAT VALUE AND SPLIT IT IN A VERY FAIR MANNER, AND THEREFORE, WHEN THERE IS A VALUE CREATED EVEN IN THIS ENVIRONMENT THROUGH NEW INITIATIVES, WITH FEMSA, WE WILL SHARE THAT EQUITABLY AND WITH ALL OTHER BOTTLING PARTNERS AROUND THE WORLD. THERE IS NEVER AN ISSUE ABOUT BEING LOCKED INTO A PRICE IN THIS ENVIRONMENT.

BARTIROMO: WE'VE GOT BREAKING NEWS ON THE SCREEN. THE HOUSE PANEL IS LOOKING AT WHETHER THE FED PRESSURED BANK OF AMERICA IN TERMS OF DOING THAT DEAL WITH MERRILL LYNCH. OBVIOUSLY, THEY'RE SUBPOENAING ACTUALLY FEDERAL RESERVE ON THIS DEAL. WE'VE GOT A LOT OF CHANGES HAPPENING IN WASHINGTON. LET ME ASK YOU ABOUT THE EARNINGS THAT COKE THAT COME FROM OUTSIDE THE UNITED STATES. 84% OF EARNINGS OUTSIDE THE UNITED STATES, IS THAT THE RIGHT NUMBER.

KENT: THAT'S ABOUT RIGHT.

BARTIROMO: RIGHT NOW WE'VE GOT THE PROPOSAL ON THE TABLE TO TAX INTERNATIONAL PROFITS DIFFERENTLY FROM THE OBAMA WHITE HOUSE. WHAT DO YOU THINK ABOUT THAT? I'VE SPOKE WITHIN A LOT OF BUSINESS EXECUTIVE WHO ARE VERY UNHAPPY WITH THIS. I WONDER HOW YOU SEE IT GIVEN YOUR HUGE EXPOSURE TO INTERNATIONAL MARKETS.

KENT: YOU CAN PUT ME IN THAT CAMP AS BEING VERY UNHAPPY. AND I'M UNHAPPY NOT LOOKING AT IT ONLY FROM MY LENGTH. I'M UNHAPPY BECAUSE WE HAVE -- HERE IS SOMETHING THAT IS GOING TO CREATE A MAJOR ISSUE FOR THE COMPETITIVENESS OF AMERICAN INTERNATIONAL BUSINESS, WHICH HAS BEEN SUCH AN IMPORTANT PART OF AMERICA FOR THE LAST 50 YEARS. AMERICAN INTERNATIONAL CORPORATIONS. EVERY TIME AMERICAN CORPORATIONS INVEST OVERSEAS AND GROW PAYROLL OVERSEAS, MARIA, THAT CREATES JOBS HERE IN THE UNITED STATES. AND THERE IS NO OTHER COUNTRY IN THE WORLD THAT TAXES PROFITS OF THEIR CORPORATIONS MADE OUTSIDE OF THEIR HOME BASE. SO WHAT THE PROPOSAL IS HERE THAT IS BEING DISCUSSED IS TAKE THE TAXES, THE PROFITS MADE OUTSIDE OF AMERICA AND TAX THOSE PROFITS BEFORE YOU EVEN BRING THEM TO AMERICA.

BARTIROMO: RIGHT.

KENT: WHICH IS GOING TO CURTAIL INVESTMENTS OF AMERICAN CORPORATIONS OVERSEAS AND THAT MANY OF THE PEOPLE THAT WORK FOR COCA-COLA IN AMERICA ARE PEOPLE THAT WORK FOR THE INTERNATIONAL SIDE OF COCA-COLA.

BARTIROMO: SO THIS IS A VERY IMPORTANT POINT THAT YOU MAKE. IT SEEMS LIKE BUSINESS PEOPLE ARE INCREASINGLY COMING OUT TALKING ABOUT THIS TO TRY AND EFFORT SOME CHANGE HERE. WHAT DO YOU THINK THE IMPLICATIONS WILL BE? RIGHT NOW, THE GOAL IS TO CREATE JOBS IN AMERICA. DO YOU THINK THAT THIS IS ACTUALLY GOING TO DO JUST THE OPPOSITE? WILL COMPANIES CUT JOBS OR EVEN WORSE, WILL THEY INCORPORATE OUTSIDE THE U.S.? WHAT KIND OF REAL IMPLICATIONS WILL THERE BE.

KENT: I THINK IT WILL DEFINITELY CAUSE UNEMPLOYMENT IN THE UNITED STATES TO GROW. I ABSOLUTELY CATEGORICALLY BELIEVE THAT. OF COURSE AS ONE OF THE MOST -- AS HEAD OF ONE OF THE MOST INTERNATIONAL AMERICAN COMPANIES.

BARTIROMO: WHICH IS WHY I ASKED, YEAH.

KENT: I ABSOLUTELY BELIEVE CATEGORICALLY THAT IT WILL DEFINITELY CAUSE UNEMPLOYMENT.

BARTIROMO: SWITCHING GEARS TO PROTECTIONISM AND THAT ISSUE WHICH OF COURSE, IS ANOTHER WORRY HERE AS EVERYBODY LOOKS INWARD. CHINESE REGULATORS REJECTED YOUR BID FOR A MAJOR CHINESE JUICE MAKER. WHY WAS THAT SUCH AN IMPORTANT ACQUISITION? WHAT IS PLAN B? HOW DO YOU FEEL ABOUT THAT?

KENT: IT WAS AN IMPORTANT PROPOSAL THAT WE MADE TO THE OWNERS OF THE JUICE COMPANY. BUT WE HAVE A GREAT EXISTING ORGANICALLY GROWING JUICE BUSINESS IN RUSSIA. THAT WAS GOING TO SUPPLEMENT AND OUR JUICE BUSINESS IF WE HAD GONE FORWARD WITH THAT ACQUISITION. PLAN B IS SIMPLY THAT WE CONTINUE TO INVEST AND CONTINUE TO GROW OUR EXISTING JUICE BUSINESS IN CHINA, WHICH IS VERY SUCCESSFUL ORGANICALLY UNDER THE MINUTE MAID LABEL AND IT'S DOING REALLY WELL, GROWING AT 40% PLUS PER ANNUM.

BARTIROMO: ARE HEALTHY DRINKS INCREASINGLY IMPORTANT FOR COCA-COLA.

KENT: ALL OUR DRINKS ARE HEALTHY. THERE'S NOTHING THAT SAYS DRINKS WITH NO CALORIES ARE HEALTHY. AND DRINKS WITH CALORIES ARE NOT HEALTHY.

BARTIROMO: THERE'S A REAL MOVEMENT IN AMERICA TOWARDS.

KENT: I THINK THERE'S MOVEMENT ALL AROUND THE WORLD FOR CHOICE, MARIA. WE ARE ALL ABOUT CHOICE. WE HAVE 400 BRANDS, 2,000 PRODUCTS. IN THE LAST 18 MONTHS, WE LAUNCHED AROUND THE WORLD 700 NEW PRODUCTS WHICH ABOUT A QUARTER WERE LOW CALORIE OR NO CALORIE. SO THAT GIVES YOU THE BREADTH AND SCOPE OF US PROVIDING IT CHOICE TO CONSUMERS AROUND THE WORLD.

BARTIROMO: ISN'T IT INTERESTING ANOTHER ISSUE HAS BECOME PART OF THE GLOBAL CONVERSATION IS WHETHER OR NOT THE DOLLAR IS GOING TO BE THE RESERVE CURRENCY FOR THE WORLD. REAL QUICK FINAL QUESTION. DOLLARS WEAKNESS, IMPACT ON YOUR BUSINESS. HOW DO YOU SEE THE CURRENCY MARKETS HERE?

KENT: WELL WHEN THE DOLLAR ACTUALLY WEAKENS BECAUSE OF 80% OF OUR BUSINESS IS OUTSIDE OF AMERICA, OUR BUSINESS DOMINATED IN DOLLARS ACTUALLY GETS BETTER. NO ONE CAN TELL YOU REALLY WHAT'S GOING TO HAPPEN TO THE DOLLAR. ALL I CAN TELL YOU FOR SURE IS WE'RE GOING TO SEE MORE VOLATILITY IN CURRENCIES I THINK IN THE WORLD IN THE COMING YEARS.

BARTIROMO: ALL RIGHT. WE WILL LEAVE IT THERE. ALWAYS NICE TO HAVE YOU ON THE PROGRAM. WE APPRECIATE YOU SPENDING YOUR TIME.

KENT: THANK YOU.





About CNBC:
CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.