Coke Tested for Pesticides in India

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    Coke Tested For Pesticides In IndiaRuth David,

    The water Coca-Colauses in its drinks in India is free of pesticides, a reputed research center found.But the validation prompted a swift rebuttal from another Indian group that accused Coke and other softdrink makers of selling unsafe products.

    None of the pesticides as-per-the-scope-of-work were found to be present in process water used forbeverage production by the plants, said the Tata Energy Research Institute, which was commissioned

    by Coca-Cola Atlanta and the University of Michigan for an independent study on its India facilities.

    The Coca-Cola Co. and its bottlers complied with the standards of relevant Indian government andregulatory agencies, the report found. New Delhi-based TERI is headed by the Chief U.N. climatescientist Rajendra Pachauri, who was a co-winner of last year's Nobel Peace Prize. Coca-Cola saidcommissioning the report was one of the steps it took to improve its product in India.

    In 2003, the Center for Science and Environment, located in New Delhi, released a report on pesticideresidues in soft drinks in India. It conducted a follow-up study in 2006 and found that little had changed.The center said it highlighted Coca-Cola and PepsiCo Int. because they control around 80% of the soft

    drink market.

    The center said TERIs latest report could not be used to give cola companies a clean chit on pesticideresidues because it had not tested the final product that consumers drink. TERI said its scientists hadtaken samples of water intake, water used in processes and waste water.

    The TERI tests also find pesticide residues in the ground water, which clearly suggests that the problemof contamination is real and needs to be addressed, the center said.

    In a country where 'round-the-clock water is a luxury, TERI also said Coca-Cola needed to work toimprove local water supplies, especially in regions where there were chronic shortages.

    Coca-Cola said it was strengthening requirements for plant sites as well as monitoring capabilities for

    rainwater harvesting and wastewater treatment. The company was accused of poor environmentalpractices and misusing local water resources at its plant in Kerala, but denied the charges. Last year, aKerala court overturned a ban on the manufacture and sale of Cokes products in the state.

    TERI looked at six of Coca-Colas plant sites and said: Five of the six site areas are rural and heavilydependent on agriculture, with cropping intensity and water use on the rise With intensive agricultureand irrigation demands, there has been a considerable increase in the use of fertilizers in these areas.Ground water samples in three of the six sites TERI examined had pesticides.

    The furor over pesticides in soft drinks doesnt seem to have hurt cola sales. A Coke spokesperson saidunit case volume in India had grown for five consecutive quartersincluding a 21% growth in the quarterending in September.

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    India: Pesticide Claims Shake Up Coke and PepsiByBrian Bremner and Nandini Lakshmanon August 09, 2006

    Welcome to the India installment of the fabled cola wars. But this time around, global

    soft-drink heavies Coca-Cola (KO) and PepsiCo (PEP) are actually on the same side.

    Their adversaries: a feisty New Delhi-based environmental group, left-leaning

    politicians in Southern India, and nonstop press coverage that has raised angst levels

    over pesticide traces discovered in these companies' carbonated drinks. On Aug. 9, the

    dispute escalated when India's southwestern state of Kerala, home to about 30 million

    people, banned the Indian subsidiaries of both companies from making or selling their

    beverages.

    Earlier in August, several other regions such as the Western coastal state of Gujarat and

    Madhya Pradesh in central India erected partial bans on the sale of Coke and Pepsi at

    schools and government offices. The Hindu nationalist Bharatiya Janata Party is calling

    for a national ban, and regional politicians with a populist streak have staged Coke and

    Pepsi bottle-smashing press events. Meanwhile, the Indian Supreme Court has jumped

    into the fray by ordering Coca-Cola to divulge its century-plus secret formula so

    government investigators can have more accurate readings of pesticide levels in its

    products.

    In short, this is shaping up to be a public-relations calamity of the first order. True, this

    is a $2 billion market that both Coca-Cola and PepsiCo dominate with a combined share

    of roughly 80%-plus. Still, "as multinationals, the scrutiny is going to be a little higher,

    and the public is going to make a judgment," says Madan Bahal, managing director of

    AdFactors Public Relations, a Mumbai-based firm that represents international

    companies such as IBM India, Barclays Bank, and ABN Amro Banking Group. "And if

    the judgment is that there is something fishy going on, it will harm you."

    PR COUNTERATTACK. This probably won't be an easy judgment to make for most

    Indian consumers, given the complex technical issues involved. What touched off the

    controversy was allegations made by the New Delhi Center for Science and Environment

    (CSE) that pesticide residues found in Coca-Cola and PepsiCo brands were 24 times

    higher than new safety standards on soft drinks that have been developed by the Bureau

    http://www.businessweek.com/authors/46376-brian-bremner-and-nandini-lakshmanhttp://www.businessweek.com/authors/46376-brian-bremner-and-nandini-lakshmanhttp://www.businessweek.com/authors/46376-brian-bremner-and-nandini-lakshmanhttp://www.businessweek.com/authors/46376-brian-bremner-and-nandini-lakshman
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    of Indian Standards. (These new rules on soft-drink pesticide levels haven't taken effect

    yet.)

    The results of the study, which sampled 57 finished drink products at 25 different Indian

    Coca-Cola and PepsiCo plants, are "clearly unacceptable as we know that pesticides are

    tiny toxins and impact our bodies over time," CSE Director Sunita Narain said when the

    group's findings were released on Aug. 2. Similar charges were made by the group

    several years back, which led the government to set pesticide standards on soft drinks

    that already exist for other food products.

    PepsiCo and Coca-Cola have attacked the CSE's findings in advertorials published in

    Indian newspapers. And Coca-Cola has posted background information on its testing

    and quality procedures done at labs in Hyderabad, California, and London for its Indiandrink lineup on the Web site of its Indian subsidiary. It has even offered to take Indian

    customers on guided tours of its processing plants as a goodwill measure.

    CORPORATE-SIZE SCRUTINY. Both companies insist their beverage products present

    no health threats. "Our products are safe and we measure that against the most

    stringent standards, the European ones," says Coca-Cola Asia spokesman Kenth

    Kaerhoeg, who is based in Hong Kong.

    PepsiCo noted in its printed ads that pesticide levels in Indian teas and milk are far

    higher. (Some levels of pesticides are common in many foods given the heavy reliance

    on chemicals in raising crops in India and other countries.) Prema Sagar, founder and

    principal of public-relations firm Genesis Burson-Marsteller, which represents PepsiCo,

    also questions the accuracy of CSE's data, given the work was done by its own labs

    without any outside peer review. "It is not valid," says Sagar. (Coca-Cola has also

    questioned the integrity of CSE's testing methods.)

    She says that both PepsiCo's and Coca-Cola's economic contributions to India andenvironmental work done there aren't getting the attention they deserve in this dispute.

    Given the big corporate names involved, the scrutiny has been extremely intense in

    India. "Big American global brands are going to attract attention," she says. "The attack

    on the colas right now grabs space" in the media.

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    FORMULA FOR REBOUND. That's certainly true, but other public-relation pros such as

    AdFactor's Bahal think both companies might be inviting trouble by primarily going into

    attack mode on CSE and merely making general assurances that their products are safe.

    A better approach, Bahal says, would be a more "substantive response" on precisely

    what levels of pesticides are in their drinks, why that isn't a health threat, and exactly

    what both companies do to keep it that way.

    Admittedly that's tough advice when it basically involves mentioning a pesticide like

    Lindane, a known carcinogen, or a neurotoxin such as Chlorpyrifos in the same breath

    as your franchise product. Still, Bahal points out the contrasting approach that Cadbury

    India took three years ago when live worms started showing up in the company's

    chocolate products in Mumbai. When Indian government lab reports confirmed the

    problem, the company quickly investigated and overhauled its packaging procedures tocalm consumer fears. That quick action and candor, plus recruiting Bollywood legend

    Amitabh Bachchan as a new pitchman, quickly restored the brand image. "They were

    specific on all counts," says Bahal.

    Right now, though, the cola tussle in India is being driven more by primal emotion

    directed at big foreign companies and public fear. PepsiCo pitchman and Bollywood

    actor and heartthrob Shah Rukh Khan, who says if Pepsi is banned in India he will go

    overseas to swill the stuff, suggested a more sensible approach would be for everyone to

    calm down and wait until the government weighs in on the matter. Yet given the rancor

    unleashed by this controversy, it may be a while before cooler heads prevail.

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