The Sunday Times FT - The karma of cola

NEW DELHI - Whatever the virtues and pleasures of Coca-Cola, its sins have caught up with it. In India, at least, it has been unable to escape its karma. Even as PepsiCo has just chosen an American of Indian origin, Indra K. Nooyi, as its fifth chief executive, Pepsi and Coke have been banned in the state of Kerala. Five other Indian states -- Karnataka, Gujarat, Madhya Pradesh, Punjab and Rajasthan -- have imposed partial bans, prohibiting the sale of Cola drinks in schools, hospitals and public offices.

The controversy over Coca-Cola arose last month when the Centre for Science and Environment (CSE), a highly reputable NGO in New Delhi, released a study that documents extraordinarily high and dangerous levels of pesticides, including banned carcinogens such as Heptachlor and Malathion, in all tested samples of Coke and Pepsi. CSE's scientists tested 57 samples of both colas from 25 different bottling plants across most of India, and in some cases found pesticide residues 24 times higher than standards adhered to by the European Union and proposed by the Bureau of Indian Standards.

Though India still occupies a miniscule place in Coke's global operations, accounting for about one percent of its worldwide sales, it represents a huge and growing market. That industry executives have not taken the ban lying down is amply clear from Coca-Cola India's web site, which affirmed within days of the report released by the CSE that tests by the reputed Central Science Laboratory in London had not found pesticide levels in Indian-produced colas beyond those permitted in the European Union. CSE responded that the British independent laboratory only tested samples provided to it by Coca-Cola or Pepsi, not by CSE or other agencies.

Both Coca-Cola and PepsiCo are going on aggressive campaigns to defend their drinks, putting large posters and fliers in shops and food markets in metropolitan centres assuring customers that the soft drinks sold in India are safe. The allegation that multinationals have differing standards for their products in the post-industrial societies, emerging economies and developing countries is one to which all companies profess sensitivity, so it is not surprising that Coca-Cola India's Aug. 11 2006 news release openly states that "we have the same uncompromising commitment to product safety and quality in our beverages in India that we offer around the world."

This controversy, however, is only the latest in a line of long-standing differences between CSE and the two cola giants, which together control over 90 percent of India's soft drinks market. In early 2003, CSE found nearly the same level of pesticides in a large number of samples of both Coke and Pepsi, and a joint committee of both houses of the Indian Parliament affirmed in 2004 its corroboration of CSE's findings. The Joint Parliamentary Committee, over the next two years, labored to set new standards, which it reconfirmed for proposal to the Bureau of Indian Standards in March 2006. The new standards still await acceptance by the Indian Government.

Coca-Cola has had a more tumultuous history in India than just its disagreements with CSE. The present dispute masks considerations that are in some respects far more serious, or certainly of greater importance. Its bottling plants are under siege, it stands accused of draining scarce water resources and activists and villagers have battled Coca-Cola on the streets and in courts. No one is prepared yet to forecast its demise in India, but the iron-clad laws of karma seem poised to extract the last drop of water from the Cola that promises to keep its consumers feeling forever fresh.

If the allegations of pesticide contamination are true, the levels of pesticide can be brought down to meet international standards. But the inescapable fact remains that Coca-Cola consumes increasingly scarce water resources. Among farmers in India, Coca-Cola and PepsiCo are known as 'pani chors' or water thieves. The water table has fallen precipitously in many parts of India, and hundreds of struggles between the beverage giants and local people have been documented around the country.

To take one example: in Kaladera, some 40 kilometers from Jaipur, over 200 villagers from 22 neighboring villages voted to demand the closure of the local Coca-Cola plant, which in nine months ending in December 2003 had extracted nearly 175,000 cubic meters of water on the payment of a meagre Rs 24,000 ($525) to the Indian government.

Among the most well-documented of these struggles has been at Plachimada in Kerala, where the Coca-Cola Virudha Samara Samiti [Anti-Coca-Cola Struggle Committee] organized a mass rally in August 2002 to protest the appropriation of 1.5 million litres of water daily by the Coca-Cola company. Hundreds of millions of Indians have no access to safe drinking water, and activists allege that the actions of Coca-Cola and other soft drinks manufacturers are calculated to aggravate acute water shortages. When the political economy of water begins to be understood, Coca-Cola's place in that narrative will not be insubstantial.