The Joy of Toxic Cola

Coca-Cola isn't keeping it real in India. Neither is its fierce rival, Pepsi. America's most beloved brands are facing a firestorm of criticism for dangerously high levels of pesticide residues in their locally-made sodas.

The well-respected research group, the Center for Science and Environment (CSE) in New Delhi, found traces of lindane, malathion, chlorpyrifos, and even the banned DDT in Indian-bottled Pepsi and Coca-Cola drinks. CSE says pesticide levels in the Indian samples are respectively 36 and 30 times higher than EU safety standards. And not surprisingly, when the same group tested bottles sold in the U.S., they were pesticide-free.

When the toxic-cola report hit the Indian papers, Hindu nationalist activists smashed Coke and Pepsi bottles in the streets and tore down advertising billboards. Members of Indian parliament immediately ordered a ban on the products in their canteen, and even threatened to revoke Coke and Pepsis licenses if the claims were verified. Universities across the country stopped supplying the sodas, while bottling plants were sealed off in some states.

Coke, like many other multinationals, has had a rocky relationship with the Indian government. In the late 1970s, the government kicked the company out of the country for refusing to locally manufacture its secret syrup. In 1993, Coke reentered the Indian market on the heels of its rival Pepsi with a vengeance. Of the 200 countries where the drink is sold worldwide, India now has the fastest growing market.

Today, the Atlanta-headquartered Coca-Cola and New York-based PepsiCo enjoy an absolute duopoly in the Indian soft drinks market. Together they own all the twelve brands of sodas tested by CSE. So it is no wonder that the two companies, despite their fierce rivalry, immediately closed ranks and threatened legal action against CSE. Nor was it surprising when the U.S. embassy in New Delhi spoke out in defense of the two American companies, describing them in the media as highly reputable and responsible firms.

To settle the controversy, the Indian government decided to expedite its own tests of the products, even as the companies panicked about falling sales. The verdict released last week was mixed, but not lethal for the U.S. multinationals. The Indian health minister told parliament that while the government also found pesticide residues in the soft drinks, the levels fell within national standards for packaged drinking water and were, therefore, safe to drink.

Both Pepsi and Coke immediately ramped up a public relations campaign aimed at wooing back the Indian public. They held a joint press conference, where the Indian CEOs of the local subsidiary posed for cameras clutching bottles of their respective brands. Pepsi placed ads in the national papers advising consumers, "refresh your faith and don't hold back your tastebuds." Soft drink vendors hung up posters proclaiming "Coca-Cola refreshes you with world-class and safe products in India."

Not quite. "The reason we found differences between U.S. and Indian products," explains Sunita Narain, head of CSE, "is because these industries are regulated in the U.S. but not in India. The companies may say we have global standards, but this is not true. There are no global standards." Most countries, including the U.S., do not have standards for soft drinks. While the companies test individual ingredients for toxics according to global standards, they follow local standards for the main ingredient of the bottled drinks: water.

In the U.S. and European Union, water used in soft drinks and bottled water is stringently monitored. Indian water standards, however, are shockingly low. The water is only required to be "potable," and the meaning of that word is not legally defined. Ground water processing is completely unregulated, and the two companies have not voluntarily set any standards for their products.

While Coke and Pepsi may have emerged relatively unscathed from the cola wars, the political battle is far from over. The health ministers announcement caused a furor in parliament, with MPs accusing the Hindu nationalist BJP government of being paid off by Coke and Pepsi. The presence of multinational companies remains a sensitive subject in India. And Coca-Cola's other practices are not likely to help its cause.

The largest Coca-Cola plant in India has also been accused of putting thousands of farmers out of work by draining the water that feeds their wells and poisoning the land with waste sludge. The plant in the southern state of Kerala, which uses 1 million liters of water a day, has been the target of protests from the local village council that is calling for its closure. Furthermore, the state's Pollution Control Board recently found cadmium at toxic levels in sludge samples from the plant. The plant has been distributing this sludge as "organic fertilizer" to local farmers. The pollution board asked Coke to stop emitting sludge from the factory, but the company continues to claim their waste makes a good "soil conditioner."

Environmental groups have long complained that giants like Coke and Pepsi callously disregard public well-being. Sunita Narain of CSE says she targeted the Indian government rather than Coca-Cola or Pepsi simply because any efforts to control and regulate multinationals have always failed. She hopes the government will discover their regulatory backbone and force multinationals to comply with tighter norms. But Ravi Agarwal, director of Toxics Link in Delhi, says the onus falls squarely on the companies, irrespective of local standards: "It is the governments responsibility to provide essential foods, but Coke and Pepsi are brands that go beyond food value. They are responsible for upholding their own international standards."

Apart from regulation, consumer boycotts are often the best check on corporate misconduct, but it isn't clear whether the bad publicity will affect sales. Kailash, whose small bakery in New Delhi is bright with blue Pepsi signs, says he is still feeling the effects. "Sales have gone down, way down," he sighs. He has stopped stocking glass bottles, the most popular way to buy cola in India. "If the doctor tells you, 'you are going to die,' you are scared," he says, "Then when the doctor tells you, now you are okay, do you just turn around and believe him?" Others like Gauri, an MBA student, have decided to take the leap of faith. As she flips open a can of Diet Coke in one of the capital's bustling markets, Gauri admits that she and her friends stopped drinking the sodas after the first report. "But Coke is a big company and it's been around for so long," she says. "I presume that the company would follow health standards, even in a country like India."

Sadly, however, for many, toxic pollution is just a fact of daily life. "We know there are pesticides in everything," shrugs 19-year-old Rahul. "There are pesticides in the soil. Through the soil we get fruit, we get the vegetables that we eat."

There may, however, well be a silver lining in this tale of corporate neglect. Prompted by an earlier study by CSE that fond unsafe pesticide levels in bottled water (including some owned by Coke and Pepsi), the government voted to adopt the European Union's standard for bottled water as of January 2004. Now, thanks to the toxic-soda controversy, the Indian government is moving toward setting enforceable water regulations. "We have to fix certain safety standards," admits Prasad Rao, the Indian health minister. "Today, water is not included in our Prevention of Food Adulteration act which guides food standards. We have to revise our norms for drinking water."

In other good news, Nepal and other neighboring South Asian countries have begun testing their locally-bottled Coke and Pepsi for toxics. And while many Indians have started drinking soda again, experts like Agarwal believe that the debacle is actually a defining moment for food safety and consumer awareness in this country.

Miranda Kennedy is a writer and radio journalist based in New Delhi.

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