BANGALORE - Coca-Cola and PepsiCo are back
in the middle of controversy in India. Samples of
their soft drinks have been found to contain
dangerous levels of pesticide. India Inc, however,
is more worried that the ban on the colas in
several states will spark an American backlash and
affect investment in India.
The
controversy was sparked by a report released two
weeks ago by the Delhi-based Center for Science
and the Environment (CSE), which found that
pesticide residues in samples of Coke and Pepsi
were an average 24 times above the norms set by
the Bureau of Indian Standards (BIS).
CSE
said that it tested 57 samples taken from 11 soft
drink brands made by Coca-Cola India and PepsiCo
India and found a
"cocktail of three to five
different pesticides". In some samples - Coca-Cola
bought in Kolkata, for instance - the level of
carcinogenic pesticide Lindane exceeded BIS norms
by 140 times.
A 2003 study by CSE had
revealed a similar unacceptable level of pesticide
in the soft drinks. The findings of that study had
triggered a storm of protests across the country
and even prompted a parliamentary probe. But three
years on, little has changed. Killer chemicals
continue to contaminate sort drinks in India.
Coca-Cola and PepsiCo have yet to clean up their
acts.
Coca-Cola India has questioned the
reliability of the studies. "The CSE is not an
accredited laboratory," said Asim Parekh, vice
president (technical). Senior officials at both
Coca-Cola and PepsiCo insist they are being
unfairly targeted. PepsiCo has pointed out in
advertisements that pesticide levels in Indian tea
and milk are far higher than those in their
products.
Six of India’s 28 states -
Andhra Pradesh, Karnataka, Rajasthan, Gujarat,
Madhya Pradesh and Chattisgarh - have banned the
sale of Pepsi and Coca-Cola products in and around
government offices and government-funded schools.
Kerala, which is ruled by a leftist coalition, has
imposed a total ban on the production and sale of
Coca-Cola and Pepsi products.
Coca-Cola’s
experience in India has often been a bit of a
rough ride. It was forced to quit India in 1977
for refusing to dilute its equity stake in its
Indian subsidiaries. It returned in 1993, two
years after India's economy liberalized. Pepsi
arrived in India in 1989. Since then, the two cola
giants have cornered 90% of the carbonated drinks
market in India.
But while the colas
dominate the market, the per capita consumption of
carbonated drinks in India is among the lowest in
the world - 10 bottles compared with 30 in
Thailand and 300 in the West. Coca-Cola and Pepsi
might be spending millions of dollars on
advertising campaigns, and both have roped in top
Bollywood stars to sell their soft drinks. But
Indians, it seems, are simply not cola drinkers.
In 2003, a month after the CSE first drew
attention to deadly chemicals in Coke and Pepsi, a
village council in Plachimada in the southern
state of Kerala sued Coca-Cola’s local bottling
unit for depleting ground water and emitting toxic
sludge. Earlier this year, dead insects were found
in an unopened bottle of Sprite, and a condom was
found in a sealed Pepsi bottle. The court slapped
a $2,200 fine on Pepsi and $2,600 on Coca-Cola.
The pesticide, or "pesticola", controversy
is likely to cost Coca-Cola and Pepsi more dearly.
The motivations of politicians pushing for
the various bans are, of course, suspect. The ban
on colas imposed by the Kerala government covers
none of the other soft drink brands sold by
Coca-Cola and PepsiCo nor the other local cola
brands in the market. It is said that if the ban
is extended to all colas, it would kill off the
local cola brands.
The ban on production
of Pepsi and Coca-Cola in Kerala will not affect
Coca-Cola since it has no production facility
running in Kerala now, and Pepsi could easily
relocate its plant in Palakkad to neighboring
Tamil Nadu. Local cola manufacturers cannot do
this easily. As for the ban on sales, Kerala
accounts for only 1% of Coca Cola and PepsiCo’s
India market.
It is local cola brands that
rule in rural Kerala. And their colas are unlikely
to be any cleaner than Coca-Cola or Pepsi. Yet the
Kerala government is taking no action against
them. It is the mighty miltinationals that
Kerala’s leftists want to be seen to be taking on.
Coca-Cola and PepsiCo are running
advertisements in newspapers claiming that their
products are safe and conform to global as well as
Indian standards. Coca-Cola said on Friday that
its operations in India followed stringent
standards for all ingredients used in its
beverages and that "these standards are backed by
analytical testing protocols". "The Coke you drink
in India would be as clean as the Coke you get in
Paris," Coca-Cola Asia group communications
director Kenth Kaerhoeg said.
Indeed, a
2001 study by the Indian Agriculture Research
Institute (IARI) found that 65% of milk samples
were contaminated with pesticides; over 40% of the
samples contained DDT, which was banned for
agricultural use in 1989. Drinking water from taps
is known to contain arsenic and fluoride, both
deadly. So why single out the cola companies?
The cola companies are not the only ones
to blame for the pesticides in their products.
Sunita Narain, director of the CSE, has pointed
out that though a parliamentary committee was
formed to examine the issue, the government has
done nothing so far. Though the BIS has had norms
for carbonated water in place for years, these
have not been adopted by the industry and the
government has done little to implement them.
Indian business has opposed the bans on
the colas. Amit Mitra, general-secretary of the
Federation of Indian Chambers of Commerce and
Industry (FICCI) said: "Any study has to be
validated or else the country’s credibility as a
law-abiding society will come under question and
affect the investment environment. An action
without a regulatory process will not only hamper
foreign investment but also domestic investment.
It is important that due process is followed so
that no investor says that we have not got
justice."
R Seshasayee, president of the
Confederation of Indian Industry (CII) has pointed
out that the standards used by CSE were part of a
government "proposal" that has not yet passed into
Indian law. "We are concerned that the apparently
arbitrary decisions [the ban] have been taken ...
without going through the due process of law."
US government and business groups are
warning that the ban on the colas will affect
investment in India negatively. "This kind of
action is a setback for the Indian economy,"
Undersecretary for International Trade Franklin
Lavin told AFP.
In the absence of tough
legislation to get the multinationals to do
business responsibly in India, the move by India’s
politicians tp ban Coca-Cola and Pepsi amounts to
little more than cosmetic gestures. India’s
politicians are making a lot of noise about taking
on the cola giants but are doing little to get
them to clean up their act. As for India’s
business leaders, its the health of the economy,
not that of people, that they are interested in.
Sudha Ramachandran is an
independent journalist/researcher based in
Bangalore.
(Copyright 2006 Asia Times
Online Ltd. All rights reserved. Please contact us
about sales, syndication and republishing
.)
