India's cola crisis bubbles up
NEW DELHI, India (CNN) -- A health scare over pesticide contamination in Pepsi and Coca-Cola soft drinks sold in India is threatening to fizz over.
In recent days the country has seen almost daily protests with angry consumers emptying bottles of the drinks onto the streets.
Lawmakers have called for a ban on Coca-Cola and Pepsi Cola over allegations earlier this month that both company's locally made drinks contain dangerous levels of pesticides -- up to 40 times higher than that permitted under European Union regulations.
The claim was made on August 5 by environmental lobby group the Center for Science and Environment (CSE).
Since then, the soft drink manufacturers have hit back, with both Pepsi and Coke -- which dominate India's $1.5 billion soft drink industry -- taking an unusually united stance insisting their brands are safe and meet international standards.
Coca-cola has filed a lawsuit against the CSE and its director, Sunita Narain, while Pepsi won a court order for the government to carry out independent testing.
But that is currently doing little to quench growing consumer uncertainty that has seen sales of the products slump by 35 to 40 percent in India.
Local authorities in several Indian states have banned Coca-Cola and Pepsi drinks, the Indian parliament has pulled products from the shelf at its cafeterias and last Friday national carrier Indian Airlines said it was longer serving Coke or Pepsi unless passengers especially requested it.
Several central government MPs have fired off angry letters to the health ministry demanding to know the levels of pesticide permitted in Indian soft drinks and seeking urgent clarification of food and beverage standards.
Though the Indian market represents only slim revenues for both companies in terms of worldwide sales, Pepsi and Coke are keen the issue is capped as soon as possible to minimize damage to their global image.
Both have rejected the CSE testing and maintain their products confirm to health safety guidelines.
"We completely refute the CSE allegations that we have high levels of pesticide," Coca-Cola India's President Sanjiv Gupta told CNN on Monday.
"The Indian government has ordered independent tests and I think that will clear the position once and for all," he said.
"We get our products tested in independent laboratories both in India and in Europe and our products are absolutely safe. We are waiting for the government report on this which should clear away all these misconceptions and bring back consumer confidence."
But Narain defended the CSE's findings, saying she was convinced of their accuracy.
"I have absolutely no doubt about our results," she told CNN. "I think instead of focusing on how we got the results, I think the two giants should look at what needs to be done about it and all we are asking for is good regulatory frameworks."
The CSE says its study found residues of common agricultural pesticides -- especially DDT, lindane, chlorpyrifo and malathion -- during testing on India-made Coca-Cola, Pepsi, Fanta, Sprite, 7-up, Mountain Dew and other soft drinks that was dramatically higher than that permitted under EU regulations.
Chronic long-term use of the products would be potentially dangerous to humans, the CSE report said.
Narain, however, pointed the finger at the government rather than at the soft drink makers for the problem, calling for tighter regulations on the quality of water used in the manufacture of the drinks to ensure minimal contamination.
Currently, only bottled water has such regulations, Narain added.
"Our study shows a weakness in the system that allows pesticide residues to be there in these drinks, which a lot of people in this country drink," she said. "Therefore, the issue in this country is to put the regulations in place as fast as possible."