Rediff India Abroad
 Rediff India Abroad Home  |  All the sections


The Web

India Abroad

Sign up today!

Article Tools
Email this article
Top emailed links
Print this article
Contact the editors
Discuss this article

Home > Business > Special

Behind the Coke-Pepsi pesticide scare

Brian Bremner, Diane Brady and Nandini Lakshman, BusinessWeek | August 29, 2006

Fearless researchers nail two big, bad American multinationals selling toxic soda to India's masses? Get Bollywood on the line! Unfortunately for Coca-Cola and PepsiCo, this scenario isn't a film pitch.

An anti-corporate lynch mob has pursued the pair of soda makers since Aug. 9, when a New Delhi environmental group released data purporting to show their soft drinks contain levels of pesticides that greatly exceed proposed Indian safety standards. In response, several Indian states banned sales of Coke and Pepsi.

If the companies have been negligent, of course, they deserve to be punished. But so far it appears that they have been singled out because they are foreign-owned. No Indian soft drink makers have been tested for similar violations, even though many people believe that pesticide levels are even higher in Indian-made milk and bottled tea.

And while pesticide residues are present in virtually all groundwater in India, New Delhi has largely ignored the problem. "We are continuously challenged because of who we are," says Atul Singh, CEO of Coca-Cola India.

About standards

It's nothing personal, counters Sunita Narain, director of the Center for Science & Environment, the group that published the pesticide data. The CSE made the charges simply because the duo "violated safety standards in India."

Narain's protestations notwithstanding, it sure looks like India -- where all those American software and back office jobs go once they're "Bangalorized" -- is having its own xenophobic moment. Some members of the Hindu nationalist Bharatiya Janata Party have called for a nationwide ban on Pepsi and Coke. And BJP party activists have smashed bottles and staged mock funerals to express their outrage.

The whole affair is bad for India. Sure, the economy has been growing at 8%-plus over the last three years. But much of that expansion has been fueled by the vibrant information technology and outsourcing sectors, which do little to help India's millions of unskilled workers.

And while the $5.5 billion India drew last year in overseas investment isn't bad, it pales beside China, which pulled in 10 times as much.

What India needs is more investment in manufacturing -- even by makers of soda pop -- if it hopes to improve the lot of its 350 million living in poverty. Together, Coke and Pepsi have invested nearly $2 billion in India over the years. They employ about 12,500 people directly and support more than 200,000 indirectly given their huge purchases of India-made sugar, packaging material, and shipping services.

Coke is even India's No. 1 consumer of mango pulp for one of its local soft drink offerings. If these two keep getting mauled, other potential investors just might reconsider their plans. "India's credibility may come into question," says S K Poddar, head of the Federation of Indian Chambers of Commerce & Industry.

Inconclusive data?

Coke and Pepsi are doing what they can to cap the frenzy. They cite research from labs overseas certifying the safety of their products in India, and say that the data released by CSE are inconclusive.

The companies may have a point. Even India's Health Minister, Anbumani Ramadoss, on Aug. 22 questioned the validity of the methods the environmentalists used to test the sodas.

It's also hard to square the outrage when New Delhi hasn't even formalized its own regulations. The levels that Coke and Pepsi are said to exceed -- by 24 times -- are still proposals that won't go into effect until early next year. And both companies have been strong supporters of new standards.

"It's absolutely in our interest to have clear regulations that are scientifically verifiable," says Mike White, chief executive of PepsiCo International. New Delhi would do better to get its own house in order and let Bollywood dream up tales of corporate villainy.

More Specials

Share your comments

 What do you think about the story?

Read what others have to say:

Number of User Comments: 20

Sub: Pesticide in Cola & Pepsi

It is vey surprising and shocking to me at the authors is taking the matter in easy way.It is very important ,sensitive matter and it ...

Posted by BL Gautam

Sub: Behind the cola pesticide scare? Need you ask?

The Communists and other 'swadeshi' freaks have always had it in for the 'bad' MNCs. And who better fits the mould than ever popular Pepsi ...

Posted by labrea

Sub: Do fair business

The tone of hyour article suggests that you are against the environmentalists' findings and support Coke/Pespi for an investment-friendly image. Its an absolutely wrong argument. ...

Posted by Sreeku

Sub: What good are Coke and Pepsi?

Its even more confusing for the consumers, when different research labs bombard with conflicting reports!! "Is Pepsi or Coke safe to drink?" , keeping aside ...

Posted by Sri Harsha

Sub: colas

The article clearly seems to be planted one inasmuch as no fresh data to counter the one furnished by Ms Sunita Narayan has been given. ...

Posted by Vivekanand Haladi



Copyright © 2006 India Limited. All Rights Reserved.