Coca Cola India

Situation Analysis:
In 2003, the community near the Coca-Cola bottling plant in Kerala, India protested against the
water scarcity and polluted water that resulted from its bottling operations. The allegations caused
the closure of the bottling plant. Coca-Cola was banned in the state for these unethical business
practices. Soon after the incident, the Center for Science and Environment (CSE), a Delhi-based
environmental NGO, released a report indicating the presence of pesticides, greatly exceeding
European standards, in a dozen popular beverages sold under the brand names of the Coca-Cola
Company and PepsiCo. This report raised serious protests all over India on the soft drink
industries, especially Coca-Cola and PepsiCo. Together, the companies have 90% of the India's
soft drink market.
In response to the allegations, Coca-Cola denies them by saying their products are safe and
questions the lab reports presented by CSE. The University of Michigan placed the Coca-Cola
Company on probation in 2006, and asked for an independent assessment of its operations in India.
The soft drinks were examined by an independent lab, The Energy and Resources Institute (TERI).
According to the reports the soft drinks were declared safe and pesticide free. However, the CSE
claimed that only the water was tested and not the other ingredients; ingredients such as artificial
flavors and sugar. After the reports from TERI were published the government declared soft drinks
as safe. However, the problems with some bottling plants still remain, due to the depleting levels
of ground water, day by day.

Critical Issues/Problems:
Solid waste and water issue: The communities near the bottling plant in India complained about
the passage of sludge as fertilizer, causing health and environmental damage. The most important
issue concerning these communities is the depletion of water levels caused by the Coca-Cola
bottling operations which have drastically reduced availability of water for irrigation purposes.
Pesticides in soft drinks: The other issue concerning human health caused by Coca-Cola is that
their bottled water and soft drinks contain pesticides which were tested by the reputed NGO, CSE.
Dual product standards: Coca-Cola is accused of having dual standards in terms of their products
and safety measures concerning human health with respect to USA, Europe and India.
Community issue: These allegations affected Coca-Cola largely with its sales and also caused the
closure of one of their bottling plants in Kerala, India. Additionally, Coca-Cola’s products are
banned in the state of Kerala, India.

Action Taken:
Coca-Cola Company, India thought seriously about its corporate responsibility and witnessing
huge sales losses. In order to gain trust among the local communities near the bottling plant, they
improved their business practices and reduced the water usage by 34%. Through the practice of
rainwater harvesting, Coca-Cola returned substantial water to the aquifers. They have stopped
distributing sludge as Biosolids (fertilizers) to farmers for agriculture use, and have taken
initiatives with the Indian government to encourage the development of additional solid waste
disposal sites. The water used for making soft drinks is treated with activated carbon filtration and
run through a purification process to ensure that the water is free of pesticide residue. The
ingredients are also closely monitored and undergo various quality checks. According to the
company’s factsheet, they strictly follow the product standards which are the same all over the
world.
Coca-Cola has also partnered with the NGO’s and the government to provide medical access to
poor people through regular health camps. In addition to their outreach efforts, the company
committed itself to environment responsibility through its business operations. For example by
following the practices of conserving energy and by adhering to the ban on purchasing CFCs,
Coca-Cola exhibited greater corporate responsibility.
The allegations in other ways helped Coca-Cola Company, India to show their corporate social
responsibility and to maintain good product quality standards. The initiatives all over India helped
them reach villages for a good cause and also indirectly marketed their products with establishing
a trust among the public. After all these allegations, the CSE is still not convinced of the quality
of the product. Therefore, Coca-Cola must prove that they have upgraded their lab with
sophisticated instrument which is capable of measuring pesticide residue in soft drinks. As per the
recent reports by CSE, they claim that the pesticide residue has gone up 27 times higher than
expected level by the Bureau of Indian Standards (BIS) (in 2006).

Opinion:
In my opinion. first of all Coca-Cola needs to accept the severity of damages caused in India and
address them by constructively planning for an ethical approach that does not intend to cure the
disease after creating it but to prevent it from happening. Since there has been lot of damage to
the ecology, environment, employees and people at three of Coca-Cola India’s bottling plants -
Mehdiganj, Kala Dera and Plachimada, as part of its social responsibility the company must
close down these facilities to stop further destruction of the environment there. Coca-Cola India
must make internal changes in products by inclining towards health-conscious and natural
ingredient list to ensure that it morally supports the health and safety of the consumers. Changes
should be made to the processes too and this should be followed by a practice of transparency in
operations, reporting of waste disposal methods, accounting for utilization of water and quality
control procedures that can ensure that the philosophy and moral inclination towards doing what
is right as stated in the Kantian theory is heeded to.