After investing more than $1 billion in India over the past decade, Coca-Cola and PepsiCo have found themselves once again in the center of a debate over pesticide residues in their products and corporate responsibility to protect customers.
Surveying Coke and Pepsi products from around the country, the Center for Science and Environment found pesticide residues in the products of the two soda giants – which together dominate more than 90 percent of the growing Indian soda market. The report, coming three years after CSE's first study found pesticide traces, shines light on India's weak food-safety laws, and threatens the profitability of two of India's biggest foreign investors.
"This is not a battle for Coke and Pepsi," says Sunita Narain, director of the CSE in New Delhi. "This is a battle for a gutsy regulator. If the government is dealing with a large, powerful company that can get away with murder, it does not build confidence that it will deal with the other areas of food safety."
The debate over Coke and Pepsi in India is a story of a long love-hate relationship. Loved by the newly prosperous Indian middle class as a hip Western accessory, and distrusted by religious conservatives and old-style leftists as symbols of Western domination in a globalized world, Coke and Pepsi have a way of inflaming passions. For environmentalists, Coke and Pepsi are useful tools to prod the Indian government into more rigorous food-safety regulation in a country where water contamination and increased pesticide use are growing matters of concern.
"Big companies make big news. Big companies of mighty nations make bigger news. I personally do not think that this reflects anti-Americanism of the middle class," says Rajeev Bhargava, a political science professor at Jawaharlal Nehru University in New Delhi. "The Indian middle class ... panics very easily when it comes to matters related to health."
In a country that has long debated the wisdom of drinking cold drinks in the summer – traditionalists say that hot drinks are more cooling, since they cause one to perspire – a report showing the existence of pesticides at high levels was almost certain to cause revulsion.
In 57 samples of Coca-Cola and PepsiCo drinks produced in 12 Indian states, the CSE found the average amount of pesticide residues to be 11.85 parts per billion (ppb), 34 times higher than the permitted limit set by the Bureau of Indian Standards. These standards by the BIS have been drafted but not implemented.
Already, Coke and Pepsi are feeling the heat. Three years after a similar report by CSE found pesticide residues up to 24 times the acceptable standards found in the West, the two soda giants have lost customers. Coke, which claimed in 2005 to have some 60.9 percent of the market share, reported a 10 percent drop in unit case volumes sold in the first quarter of this year. Pepsi, which has a 36 percent market share, seems to be weathering the storm better, because of its concentration in the fruit juice and sports drink markets.
Coke and Pepsi are not the only contaminated food products, however. A previous study by CSE found pesticide residues in many bottled water brands sold in India, and a committee set up by the Indian Ministry of Agriculture also found pesticide residues such as DDT (dichloro diphenyl trichloroethane), HCH (hexachlorocyclohexane) and BHC (benzene hexachloride) in everything from milk and baby milk powder to honey, fruit jam, and fresh fruit.
The problem has as much to do with agricultural practices encouraged by the Indian government – a focus on boosting yields with pesticides and chemicals – as it does with growing demand for water. Across much of India, tube wells have lowered the water table, leaving those pesticides that have trickled into the groundwater at ever-increasing concentrations.
"It is suspected that most of our water bodies and soils are contaminated with these chemicals or with their degradation products," wrote the All India Coordinated Research Project on Pesticide Residues in their 2000 report. More than 60,000 tons of pesticides are used in India, recent studies show – 70 percent of them insecticides including DDT, a substance that spawned the modern US environmental movement because of its links to cancer and birth defects.
With protesters defacing Coke and Pepsi signs in Mumbai (formerly Bombay), burning Coke cans in Calcutta, and even force-feeding the sodas to donkeys and camels – presumably a sign that the drinks are only fit for animals – the industry has responded with a media blitz saying their products are safe.
"The soft drinks manufactured in India comply with stringent international norms and all applicable national regulations," says the Indian Soft Drink Manufacturers Association. The industry body pledged to abide by new standards that have been drafted, but not "notified" – that is, not enforceable – by the Bureau of Indian Standards.
"Ultimately, the onus is on manufacturers to clean up the pesticide residues which are coming in the agricultural products and the water supply," says Deepak Jolly, a senior spokesman for the Indian affiliate of Coca-Cola. "We say, let the government come up with notified standards [of pesticide residues]. There are no notified standards now. But we are confident that we will not only meet them, but we will exceed them [in promoting safety]."
In the meantime, some of the market is already shifting away. Government canteens and schools have already banned Coke and Pepsi in the states of Gujarat, Madhya Pradesh, Rajasthan, and Punjab. Karnataka imposed a partial ban, and Kerala has completely embargoed the sale and manufacture of the drinks.
Rajeev Bhargava, the political scientist says that Coke and Pepsi have a much tougher battle than cleaning up the pesticide residues. They must reverse a perception that these cola superpowers are more interested in profits than in customer safety.
"A lot of people would say, 'Would they dare market a product with such high levels of pesticides in foreign countries?' And the answer is clearly, no," says Mr. Bhargava. "My guess is that public memory is short and colas will be back, but they must bring their Indian house in order."