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Cola ban may hit investment: Trade groups

Last updated on: August 10, 2006 18:03 IST

Federation of Indian Chambers of Commerce and Industry says banning colas without following proper law will hurt India's credibility and investment climate.

"If without following due process of law, governments start announcing a ban, India's credibility as a law-abiding country may come into question," Ficci President S K Poddar told reporters.

Ficci General Secretary Amit Mitra said the chamber president would write to Kerala Chief Minister, appealing to him to "please follow the due process... (and) let the regulator substantiate the violation as per existing laws before taking action".

On Wednesday, Karnataka decided to ban sale of Coca Cola and Pepsi in educational institutions and hospitals, while Rajasthan, Punjab, Madhya Pradesh and Gujarat have already banned the sale of Pepsi and Coca Cola in educational institutions and government offices.

Action without following regulatory process "will not only affect foreign investment, but also domestic investment", Mitra said.

"It is important that due process is followed so that no investors says that we have not got justice," he said.

Mitra termed the action of Kerala government to impose a ban and asking the company to take its investment back as a "dangerous precedent for the industry."

CII concern: The Confederation of Indian Industry is extremely concerned at the recent developments in the case of reported presence of pesticide residuals in carbonated beverages.

Expressing dismay over the controversy and the subsequent actions by several state governments to ban the same and in the case of Kerela, to ban the manufacture and scrap the licences of Pepsi and Coca Cola to manufacture and sell, R Seshasayee, president, CII, said the government action appeared to be arbitrary, avoidable and has caused unnece-ssary panic.

"We are a law abiding country. Government actions have to be driven by rule of law and in the overall public interest. We are concerned that the apparently arbitrary decisions have been taken to ban manufacture and sale of the carbonated beverages, without going through the due process of law" said Seshasayee.

Expressing concern over such actions, on reports based on 'proposed' standard, that has not even been notified under the law of the land, Seshasayee added such reactions enormously impact the country's image and credibility. 

The CII President added the CII has been working very closely with the national standard setting bodies viz : the Central Committee for Food Standards and the Bureau of Indian Standards and in facilitating development & implementation of scientific standards for all products including the food and beverages sector.

Industry is committed to providing the consumer products conforming to the highest standards of safety and quality, as appropriate to our country. Currently,  soft drink manufacturers are conforming to the input standards as had been made applicable to them. They remain open to standards which are scientific, can be implemented, have a validated testing protocol and conform to best practices.

As a general rule of CODEX, pesticide residue levels are fixed on raw agricultural commodities.  The CII president expressed satisfaction at the constitution of a National level committee by the ministry of health under the chairmanship of the DG, ICMR to examine the matter in greater detail and advise on the technical aspects of fixing pesticide minimum residue levels in soft drinks and the appropriate methods of analysis and testing protocols.

The CII president has urged expeditious finalisation of the recommendations of  the National level committee by the ministry of health to enable its quicker implementation.

Complete coverage: Soft drinks, hard truths


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