India's cola revolt taps into old distrust

Yet the distrust goes back generations, even centuries, cultural observers say. To many Indians, the activities of the British here were seen largely as looting – taking India's treasure with little regard for its people. After independence, Prime Minister Jawaharlal Nehru promoted a strongly socialist economic mentality, isolating India to protect it from the whims of outsiders.

"There is a generation that harks back to that [previous] experience, and it has profoundly influenced the thinking of bureaucrats and intellectuals," says Sumit Ganguly, an India expert at the University of Indiana in Bloomington. "They set the political discussion."

This strain is most obvious in the southern state of Kerala, which is run by a Communist government, as well as a chief minister who "still claims to be a revolutionary" tilting against the evils of capitalism, says Mr. Ganguli. It is so far the only state to ban all sales and production of Coca-Cola and Pepsi products. In addition, it has also declared its intention to be a "Microsoft-free" zone – using Microsoft's competitors in state schools to protest the company's virtual monopoly in the PC market.

Yet even in Karnataka, home of high-tech hub Bangalore, the ban on Coke and Pepsi in schools and hospitals resonates with a wary populace. For this reason, experts say, the cola revolt there and in six other states has more to do with politics than public health.

After all, the overreliance on pesticides in Indian agriculture means that "pesticides are present in everything – even breast milk," says Arvind Kumar, a researcher at the watchdog group Toxic Links here. Twenty percent of all food commodities exceed the maximum pesticide residue level, and 43 percent of milk exceeds the maximum residue levels of DDT, according to a 1999 report by the All-India Coordinated Research Program. But "if you target multinational corporations, you get more publicity," Mr. Kumar adds.

Karnataka health minister Mr. Ashok dismisses the claim: "The decision was taken purely on the basis of public health," he says, adding that Karnataka might also move to a blanket ban like the one in Kerala.

Even with such threats, however, multinational corporations aren't likely to stay away. Actions like these "will only slow down the pace of reform, they cannot kill it," says D.K. Joshi, principal economist at CRISIL, a credit-ratings company in Mumbai (formerly Bombay).

Still, recent weeks offer lessons on how to negotiate the prickly Indian market. Mr. Joshi suggests that companies should stay out of states hostile to big business. Others say companies will have to be better at outreach. "They have to look beyond the bottom line and cultivate an image of working for the benefit of the country," says Mr. Ganguly.

Indeed, the froth over fizzy drinks could benefit multinationals in the long run, some say. "In the new atmosphere of globalization, people are slowly realizing that there is no way out from depending on the private sector," says Ganguli.

• Saurabh Joshi contributed to this report.

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