India cracks down on Coca Cola, Pepsi

By INDRAJIT BASU, UPI Business Correspondent

CALCUTTA, India, Aug. 7 (UPI) -- Controversy is nothing new to the Indian operations of Coca Cola and Pepsi. But it reached a high point on Tuesday when a Delhi-based privately owned environment monitoring organization, the Center for Science and Environment charged the two cola giants with selling soft drinks containing traces of four extremely toxic pesticides and insecticides -- lindane, DDT, malathion and chlorpyrifos.

"Twelve major cold drink brands manufactured by Coca-Cola and Pepsi and sold in and around Delhi contain a deadly cocktail of pesticide residues," she Sunita Narain, director of the CSE at high profile press conference. "These pesticides include potent chemicals which can cause cancers, damage the nervous and reproductive systems and reduce bone mineral density."


The CSE also said that in all the samples, the levels of pesticide residues far exceeded the maximum residue limit for pesticides in water used as "food", set down by the European Economic Commission. In Pepsi brands, the total pesticides on an average were 36 times higher than the EEC limits. The Coca-Cola brands contained levels 30 times higher.


"Our findings cannot be ignored," said Narain. "The demand for these soft drinks is on the rise. On an average, an Indian consumes six bottles and every Delhi resident 50 bottles in a year."

The stunning revelation that started with a short press conference has however, blown into a major outcry from the Indian parliament -- in a rare instance of acting with speed -- where on Wednesday, Indian parliamentarians decided to banish the drinks from its premises and even removed advertisements promoting the 12 brands.

"The government will take steps keeping in mind the collective wisdom of the members here," said Health Minister Sushma Swaraj on the floor of the parliament adding that the government had sought a comprehensive report on the findings of a study.

Worse, Coca Cola and Pepsi hatred came bubbling out from all corners of India, as political organization, like the Bharatiya Janata Yuva Morcha, the ruling BJP's youth wing launched a Coca Cola and Pepsi brands' bottle breaking agitation all over the country today.

And, governments of a few Indian states -- West Bengal, Karnataka, Tamil Nadu, Kerala and Maharashtra -- collected samples of the two cola giants to conduct their own laboratory test threatening a ban of the 12 brands within the states if tests proved positive.


The CSE findings were immediately denounced by Sanjiv Gupta, president and CEO of Coca-Cola India and Rajiv Bakshi, chairman of Pepsi India, who said that the CSE report was "baseless" and that they were open to the idea of testing by an internationally-accredited independent laboratory.

"Our products are tested by top-grade laboratories like the Wimta laboratory in Hyderabad and the T&O laboratory in the Netherlands. They are of world class and the same as what we sell in Europe and the U.S.," the companies said by way of a joint declaration, adding that their products are the same that Americans drink.

CSE however claimed that neither company's products manufactured and sold in the United States had tested positive for pesticides. The CSE said that it had procured bottles of these brands from the US for testing as well.

Nevertheless, the contaminated soft drinks controversy could not have come at a worse time for the two majors.

Indians -- who revels at the sight of multinational corporations squirming -- have not yet forgotten the two being hauled up the Indian Supreme Court for causing environmental damage to the Rohtang Pass area in the Upper Himalayas by painting their advertisements on rocks.


Coca-Cola, in particular, has been at the receiving end lately. Its celebrity icon, a local movie star who is now facing trial after being involved in a hit and run case accused of killing a Mumbai citizen six months ago, has already given a beating to Coke's brand popularity within the country.

More recently, the Greenpeace Environment Trust, the Indian arm of the international environmental organization urged the State Pollution Control Board in Kerala to serve a closure notice on two of Coca-Cola India's bottling plants in the state. Greenpeace accused the sludge produced at the plants and supplied to farmers as fertilizer contained dangerous levels of cadmium and lead.

That led the Kerala government to check out the hazardous content in the fertilizers, which, on the day the two cola majors were being boycotted by Indian parliamentarians, validated the accusation. Kerala said that its independent tests too reveal high levels of cadmium in the Coca-Cola sludge. Kerala has now instructed the company not to let the sludge out of factory premises and not to use it as fertilizer, even within the premises, as a matter of precaution.

The two cola giants meanwhile are trying hard to defend these allegations. Suspecting "motives" behind such report, they said, "there may be a desire to create panic and deliberate scare behind the report". They are also threatening to sue CSE. "The allegation is serious and it has the potential to tarnish the image of our brands in the country," said Coke president Sanjiv Gupta. "If this continues, we will consider legal recourse.''


"The (CSE) report is baseless and should be disregarded forthwith," said PepsiCo India chairman Rajiv Bakshi. "We are willing to get the matter investigated by the top 10 scientists of the country."

But legal recourse and company-initiated investigations notwithstanding, the woes of Coca-Coca and Pepsi's are not about to end soon, experts say. In fact, it may just aggravate. For, six months down the track, India faces elections in three important Indian states and general elections are scheduled after a further six months. Election campaigning has already begun, slowly but assiduously. And Indian opposition, fear the BJP sources, will take advantage of the present government's pro-MNC stand to gain political mileage.

The outcry in the parliament, minister Swaraj's assurance to her fellow parliamentarians, the BJP youth wing's theatrical posturing, all point to a favorite past-time among Indian politicians, one that goes down very well with the common Indian public -- MNC bashing. After all, this is not the first time Coke is facing banishment from the country. The company was ousted once already, in 1977, when India wanted all multinationals to divest majority stake in favor of Indian shareholders in order to continue operations in the country. Coke didn't want to comply and had to leave. A similar agitation may well build up and intensify in the coming days, say skeptics.


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