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Cola controversy runs out of fizz

December 28, 2006 17:30 IST

Twice in the past three years, the Centre for Science & Environment, has released studies that show that soft drinks contain pesticides. Each time that announcement was made, sales dipped and public and political protests followed.

Sunita Narain, director of CSE, said, "It's important for us to review all food norms and that too not for the convenience of the industry, but for public health reasons."

Marketing and communications experts say that Coca-Cola and Pepsi continue to grapple with the CSE's allegations, because of a lack of industry standards.

What's more, its aftermath refuses to fizzle out. In August 2003, Delhi-based NGO, Centre for Science & Environment went public with its findings that the leading soft drinks brands like Coke and Pepsi, contained pesticides, 27 times higher than EU norms.

At stake, was the credibility of PepsiCo and Coca-Cola, who were spending almost Rs 150 crore (Rs 1.5 billion) together on brand building. But it's natural that when things go wrong for brands with such high visibility, there is a backlash.

Adversity brought the arch-rivals together for media appearances, to fight the battle in the public eye. They counter-charged by demanding a testing of samples by an independent agency. As part of the emergency damage control exercise, Coca-Cola and Pepsi, released full-page ads.

Rajiv Bakshi, chairman, PepsiCo told CNBC-TV18, "Our quality is the best. We conform to the best international standards, we are appalled and taken aback by these allegations."

Sanjiv Gupta, CEO, Coca-Cola India, adds, "I can say it 50 times, we don't have pesticide, we get our samples tested in our laboratory in the Netherlands."

Nobody bought that story and also, the issue got politicised. While the Indian Parliament banned sale of colas in their canteens, other state governments like Karnataka and West Bengal threatened a ban as well. Retail offtake saw an immediate impact, with some retailers reporting an almost 35 per cent dip in sales.

Three years later, the players admit in private that the sales haven't quite recovered, and are gradually shifting focus to non-fizzy offerings like juices. And while this summer they went on an advertising spree to fizz up sales, CSE struck again with similar allegations.

The backlash was similar with political-protests and press ads reassuring safety. The difference being that this time, both Coca-Cola and Pepsi, kept quiet for more than 10 days before talking in public.

These experts blame the CSE for putting the cola companies through trial by media. However, they feel that Coca-Cola and Pepsi should have sprung into action, as soon as news broke for the first time in 2003.

Roger Pereira, managing director, Roger Pereira Communications, says, "Ask CSE what batches have you got sampled, check out those batches, check out other samples from other batches in the market place. And if there was an iota of doubt, hold back and freeze sales, so the customer gets reassured that the company cares."

Punita Lal, executive director (marketing), Pepsi, says, "Recall is not a good idea, why should we do it if our product is safe, it would have seemed that we are at fault."

Even as public relation drove the initial firefighting, the cola ads were later released. The pesticide issue was addressed with the usual tongue-in-cheek advertising. However this year, Coke and Pepsi's tone of advertising has been serious. Of course, the jury's out on who was more reassuring, Coke's celebrity ambassador or Pepsi's CEO.

Pranesh Misra, COO and president, Lowe, explains, "I think Rajeev coming on screen was a very brave decision and I think it was little more credible than Aamir or a third party making a statement.

MG Parameswaran, executive director, FCB Ulka, says, "Coke's Aamir Khan was more convincing while the company head is an interesting approach. But what's the long-term strategy with the company head - is he continuously going to be a public face like Damodaran was, who continued to talk to the media for a year. Is Rajiv going to do that?"

Predictably, Punita Lal says, "Our Rajiv ad worked and we continued with our activities like the Blue Billion Express."

Three years later, the issue of labelling pesticide content on soft drink bottles is pending in the Supreme Court. By the end of 2006, the government had hinted at fixing pesticide residue levels in soft drinks, under the new Prevention of Food Adulteration norms. At the moment, though, there are no announcements and the Rs 7,000 crore (Rs 70 billion) soft drinks industry continues to lack regulatory standards.

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Molshree Vaid,