Financial Daily from THE HINDU group of publications
Monday, Aug 04, 2003
Marketing - Standards & Benchmarks
Columns - Random Walk
Coke takes a poke
EVER since Dr John Stith Pemberton invented the world's most popular soft drink over a century ago (in 1886, to be precise), Coca-Cola has been attacked by health faddists, consumer activists and plain worried mothers as the embodiment of empty calories and vitamin-less froth - a dangerously real health hazard.
Others, though less strident, have tended to be equally dismissive of colas in general. In the early nineties, Steve Jobs, Chairman and CEO of Apple Computer, was looking for some new blood to run his maverick computer company. At PepsiCo, he found John Sculley, then President of the No. 2 cola maker.
Trying to woo his target away from the low-tech world of fast moving consumer goods to a high-tech world of cutting-edge knowledge, Jobs threw Sculley the now famous bait: "What... do you want to spend the rest of your life selling sugar water? Or do you want to come to Apple and change the world?"
The fact that Sculley had to subsequently quit Apple in disgrace - without changing the world - is another story. Our story, though, concerns the spot of trouble Coca-Cola India finds itself in.
First, it had to face the ire of the citizens of Palakkad district who claimed that the Coca-Cola factory at Plachimada was depriving them of drinking water.
The former MLA of Chittur and secretary general of the Janata Dal (S), Mr K. Krishnanakutty, recently alleged that although, in its project report, Coca-Cola India had indicated only one bore well, the company had, in fact, dug six of them.
Mr Krishnankutty further claimed that the 260 bore wells that had been functioning in the area went dry because the groundwater table had gone down, due to the Coca-Cola plant's operations.
The Perumatty grama panchayat cancelled Coca-Cola's licence for the Plachimada plant on April 7 "for violating various statutory rules as well as for overexploitation of groundwater and creating pollution," all of which was affecting the local people, according to the panchayat president, Mr A. Krishnan.
Even as it was fighting this fire, Coca-Cola India found other flames fanning fast elsewhere in its disturbed house. BBC Radio 4, in its `Face the Facts' programme, reported, after doing its own testing, that the sludge produced as a by-product at the company's bottling plant at Palakkad and supplied to farmers as a fertiliser contained dangerous levels of cadmium and lead. Coca-Cola India has denied media reports that the sludge contains toxic substances. Mr D.S. Mathur, Vice-President-Technical Operations, Coca-Cola India, recently said that the company had been using the sludge, which facilitates moisture retention, within its own premises for the last three years.
He also added that the company has only six bore wells and two open wells within its premises in Palakkad, and uses 0.5 million litres of water for its daily operations. It is now working on reducing its water consumption.
In the last 18 months, the company has reduced its consumption of water by 25 per cent, said Mr Mathur. The company has also implemented a rainwater harvesting system within the facility and was willing to share its expertise in this area with the local community.
Mr Mathur believes that Coca-Cola India has done no wrong as far as environmental standards are concerned. The company conducted an `environment due diligence' before commissioning the plant, a monitoring survey after commissioning of the plant and an environmental impact assessment in 2000-01.
The Kerala Pollution Control Board is now in the process of examining the issue and will have free access to the company's facility, said Mr Mathur.
Coca-Cola has weathered many a storm, including, on its home turf, the great cyclamate scare of the late 1960s. It will get over the current mess, perhaps a little scarred and possibly a mite wiser to recognising local realities and wishes.
A 1916 booklet on the "romance of Coca-Cola" attributed its success to "continual struggle and hard, patient work." For Coca-Cola India, that should include good manufacturing practices and respect for its consumers - however sugared they may be.
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