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Coke & Pepsi Sales Collapse in India Due to Pesticide Contamination

From Agribusiness Examiner #277
August 11, 2003
By Al Krebs <avkrebs@earthlink.net>


PEPSI AND COKE BATTLE
CONSUMER PANIC IN INDIA AFTER
CHEMICAL POISON RESIDUES
DISCOVERED IN SOFT DRINKS

RAMA LAKSHMI, WASHINGTON POST: This is one war that PepsiCo and Coca-Cola are not waging against each other.

Since an Indian environmental watchdog group released a report alleging that the drinks contain high levels of pesticide residue, the two international cola giants have battled consumer panic, "smash-the-bottle" street campaigns and angry lawmakers calling for a ban on the products. Both PepsiCo and Coca-Cola have issued countless rebuttals and published advertisements disputing the allegations. On [August 8], they took the matter to court.

"Unfortunately the whole matter has come to a point where it is beginning to damage our business in India," David Cox, Coca-Cola's Asia spokesman, said in an interview.

The unlikely alliance formed soon after the release on [August 5] of a report by the Center for Science and Environment, a private group based in New Delhi that has fought numerous environmental battles against the bottled water, automobile and paper industries. Tests of 12 leading drinks produced and marketed in India by the two companies showed that "all samples contained residues of four extremely toxic pesticides and insecticides: lindane, DDT, malathion and chlorpyrifos," the report said.

"In all samples, levels of pesticide residues far exceeded the maximum residue limit for pesticides in water used as 'food,' set down by the European Economic Commission," the report stated.

The report asserted that "each sample had enough poison to cause --- in the long term --- cancer, damage to the nervous and reproductive systems, birth defects and severe disruption of the immune system."

The tests made headlines in newspapers across the country [August 6], and the
Indian Parliament discontinued the sale of Pepsi and Coke in its cafeteria, while several lawmakers demanded a ban on the drinks.

"They are playing with the lives of the people," Ramjilal Suman, a member of Parliament from the opposition Samajwadi Party, shouted from the floor of the lower house. "This is nothing but poison in the name of soft drinks." Another legislator called the drinks "a silent killer."

The health minister, Sushma Swaraj, told Parliament that the results of the study were "shocking" and promised a "comprehensive inquiry." Samples of leading cola brands were sent to government laboratories for independent tests.

Indian law requires only that drinks be made from potable water --- without defining the term.

At least two public interest groups filed court petitions calling for a nationwide ban on the drinks. For a third day, young members of various political parties and student groups demanding a ban smashed bottles of the two brands on streets across the country [August 8].

In an unusual joint news conference, PepsiCo and Coca-Cola --- which enjoy a growing $1.2 billion market in India, selling about 6.5 billion bottles per year --- swiftly denied the report's contentions and asserted that pesticide levels in their beverages were below EEC levels.

PepsiCo took out newspaper advertisements that gave details of its testing methods and declared: "The safest thing you are likely to drink today is a Pepsi."

Vasi Reddy of Vimta Laboratories, a firm that PepsiCo used for tests, said that "in this billion-plus developing nation, due to excessive pesticide use, our entire food chain contains pesticide residues. In tests, even human milk in India contained pesticide residue" that was greater than the limits set by the Worth Health Organization.

"The real issue is to have a proactive policy on phasing out pesticides," Reddy said.

Reddy said the residues found in PepsiCo samples were below EEC limits, but Sunita Narain, head of the Center for Science and Environment, said the results that the two companies have published in their advertisements reflect tests conducted on the raw and treated water they use, not on the final product.

Cox, the Coca-Cola spokesman, said his company's standard procedure worldwide was to test for pesticides and contaminants, and that they were free of pesticides.

"This is why we have to consider all options, including legal ones," Cox said.

Senior officials have flown in from Coca-Cola's headquarters in Atlanta and are conducting tests on the products bottled and sold in India.

Coca-Cola filed a motion in the Bombay High Court challenging state officials' actions in confiscating a huge stock of its products in the western city of Pune. PepsiCo, meanwhile, filed a petition in the New Delhi High Court seeking to restrain the Center for Science and Environment from publishing its report, and requested an independent evaluation of the allegations.

Narain, head of the private group, said the report was not intended as an attack on the beverage giants. "Our battle is not with Pepsi or Coca-Cola," said Narain, "it is with the Indian government, whose norms are a vague maze of meaningless definitions."

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