Question 1:

Explain in your own words, the cola controversy in India. Do you think MNCs like Coca-

Cola and PepsiCo seem to adopt different standards when it comes to the use of materials

in their soft drinks- a high standard of inputs for developing countries?

Explain in your own words, the cola controversy in India.

Do you think MNCs like Coca-Cola and PepsiCo seem to adopt different standards when it

comes to the use of materials in their soft drinks- a high standard of inputs for developing

countries?

I don’t think MNCs like Coca-Cola and PepsiCo seem to adopt different standards when it

comes to the use of materials in their soft drinks. They should not use a high standard of inputs

for developed countries like Europe, America and poor quality materials for developing

countries like India, Columbia. This discriminatory approach is quite unethical. Standards are

supposed to be universal regardless of whether or not the developing countries enforce these

standards or not. This should be done so as to safeguard the health of the consumers. At the end

of the day it is the consumer's wellbeing that has to matter and not the profit margins. Any

company that ignores standards simply because the government is not watching thereby

threatening the lives of the consumers lacks ethics.

Ethical theories in relation to business do not support the discriminatory approaches in which

Coca-Cola and PepsiCo do not adhere to the same standards in developing countries as those in

the industrialized countries.

According to Utilitarian theory, MNCs like Coca-Cola and PepsiCo should not use poor quality

materials for developing countries for their high profits. For one or two company’s profit, it is

unethical to sacrifice a large number of people’s health of developing countries with poor quality

materials. Large amount of pain for the small amount of pleasure is not justifiable. In addition,

the companies were established under the Foreign Regulatory Act (FERA) which means their

operation must be in accordance with the international set standards of quality products. So

according to Rawls’s Theory of Justice, Coca-Cola and PepsiCo should follow their duty which

is same standards for all countries.

Kantian theory does not support the act of using different input materials for different countries

as well. It says people should follow their duty properly. Coca-cola and PepsiCo’s duty is to treat

people equally all over the world. So, for the benefit of general people they should follow same

standard for developing countries as they follow for developed countries.

Question 2:

Having gone trough the Cola case study, would you advocate that the government of India

bans these soft drinks forever?

I don't think it's fair to ban Coca-Cola and PepsiCo forever in India just because the sanitation

level is low. They should work on this problem, not try to accept it along. The real problem is not

with Coke or Pepsi. There should be control on the usage of pesticides as well. The general level

of sanitation is also poor in India.

The main problem is that Coca-Cola and PepsiCo draw too much underground water at its

bottling plants, thereby depleting the water resources of the local people. However I don’t think

this is the real issue, because if it were so then the solution would be fairly simple: work out an

arrangement whereby Coca-Cola and PepsiCo compensate the community for the water that it

utilizes, and does it in a sustainable manner, for example by requiring Coke to recharge a

minimum amount of groundwater through rainwater harvesting. So the concern should be how to

build a better bottling plant that utilizes water in a sustainable manner, not ban those soft drinks

companies.

Having gone through the Cola case study, here are some reasons why Coca-Cola and PepsiCo

should not be banned in India:

Coca-Cola and PepsiCo have maintained in India that their products are safe. They have

got a ‘clean chit’ from The Energy and Resources Institute (TERI) in an audit that did not

find pesticides in the water used for making soft drinks.

US government has warned India not to ban Coke and Pepsi as it may create a negative

impact on FDI in India.

Coca-Cola and PepsiCo are depleting water resources. Surely the solution of this is to use

better technology and better water management principles in order to better utilize

available resources in a sustainable manner. This should include more efficient usage of

water, better recycling, better irrigation techniques, etc. The solution cannot be to

abandon modern industries and move towards a pre-modern economy.

Coca-Cola and PepsiCo have started rain water harvesting projects in 26 of their plants.

This has reduced water use by 25 percent and the water saved has been made available to

water-starved villages nearby.

Coca-Cola and PepsiCo are harmful as it contains pesticides. This may be true, but this is

simply because the water that Coca-Cola and PepsiCo use in India contains pesticides.

Clearly they do not buy pesticides from pesticide manufacturers and pour them into

bottles. Targeting Coca-Cola and PepsiCo for the presence of pesticides in the water

supply seems unreasonable.

India is taking the benefit from the technology, the management and logistics expertise,

as well as the new energy and ideas that Coke, Pepsi, etc. bring into the country.

Banning according to me will not solve the problem. Even cigarettes and other alcoholic drinks

are bad for health but they are not banned. People should know what is good and what is bad for

their health and take decisions accordingly. I am not claiming that Coca Cola or Pepsi is an

angel. However banning is not justified decision for them. So proper regulations are necessary to

solve the dilemma.

Question 3:

Put yourself in the position of the CEO of a Cola company and present your viewpoint as to

why your organization attracts so much of adverse publicity in the Indian media and with

the general public.

Coca-Cola and PepsiCo have often been the focus of public protests and adverse publicity in the

Indian media -- accused of exhausting groundwater resources, contaminating groundwater,

contributing to climate change and having high levels of pesticides in its drinks, among other

issues. As one of the world's most valuable brands, Coca-Cola does attract attention from all

quarters. I think Indian media and research institutes using Cola Company’s brand name to draw

attention with adverse publicity. Cola Company is a huge brand name and putting other name

beside it, is a prestigious issue. So this is one of the reasons behind adverse publicity.

These adverse publicities in the Indian media and with the general public are a reminder of

India’s sometimes acrimonious relationship with huge multinational companies. Previously they

did not want or like to foreign investment in India. They thought foreign companies might take

their country’s valuable wealth. Anti Americanism may be the reason of adverse publicity of

Indian media and general public. They don’t want to make huge business in their country by any

American company.

The Center for Science and Environment (CSE), an NGO in New Delhi, claimed that Cola

company’s products contains high level of pesticides and they use poor quality input materials.

The claim against Cola Company is not true. Actually they are providing same test all around the

world by using same machinery. So, it is not possible to mix any other elements in Indian cola. It

is some extent true that the water the cola company using to produce soft drinks is not toxin free.

It is the problem of water of India not the problem of Cola Company. I think the Center for

Science and Environment (CSE) using Coke’s brand name to draw attention to their campaign

against pesticides.

Common beverage such as milk, tea, coffee and other locally produced soft drinks contain a

great deal of impermissible residues of pesticides and nobody raises any voice against them, why

the Pepsi and coke companies are often targeted and haunted. The fear seems to be based on the

kind of backlash Indian exporters are likely to face in the united states, because of the action

against their companies in India.

There are also a lot of Indians, including some notable leftist, who feel that we are not on firmer

grounds. Their muted response to the high pitch of criticism raised against the cola companies in

many quarters is ample evidence to the lack of sympathy for the cause of anti-cola agitations.