How are cola companies coping with pesticide isssue?

Excerpts from India Business Hour on CNBC-TV18 Watch the full show » Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

The Centre for Science and Environment has reported pesticides in soft drinks for the second time in three years and states like Karnataka and Kerala have banned colas in educational institutions and government offices. CNBC-TV18 looks at how soft drink makers are coping with the controversy.

 

Kerala has even called for a ban on soft drink output. The Centre for Science and Environment has opened an old issue, with the same old allegations it made three years ago. It says that Coke and Pepsi contain 24 times more than the permissible amounts of pesticide in them.

 

This time the Indian Soft Drink Manufacturers Association, ISDMA, is the mouthpiece for Coke and Pepsi and it responded to the Kerala ban saying, "Our products manufactured in India are absolutely safe and meet every safety standard set by food, health and regulatory bodies in India and all over the world."

 

Almost a week after the ban, Coke and Pepsi ran advertisements to educate consumers on these issues. Coke has even asked customers to contact them, while Pepsi claims that soft drinks are safer than many essential food items like eggs, rice and even apples.

 

Industry watchers expect the companies to use this as the plank to their counter attack. In addition to assuring their trade partners, both players are looking for third party endorsements as well and doctors might be roped in. And last time's experience has also taught them that public and media memory is short, so it pays to keep quiet.

 

Consultant, MarketGate, Sharda Agarwal said, "The first time they were caught off guard, this time I guess, they were expecting it due to the third anniversary of the controversy. I think, companies should instead wait and watch and then take the issue head on."

 

Some experts also say that this time, people are fed up with the pesticide controversy. They feel soft drink makers have become soft targets. Company officials can't believe their bad luck, just as sales had begun to pick up, the pesticide issue has raised its head. Coke and Pepsi hope they will be able to put a lid on the issue as soon as they can.