Coke and Pepsi- Pesticide Fiasco
On August 5th, The Center for Science and Environment (CSE), an activist group in India growthissued a press release stating: "12 major cold drink brands sold in and around Delhi contain adeadly cocktail of pesticide residues".According to tests conducted by the Pollution Monitoring Laboratory (PML) of the CSE fromApril to August, three samples of twelve PepsiCo and Coca-Cola brands from across the citywere found to contain pesticide residues surpassing global standards by 30-36 times including
lindane, DDT, malathion and chlorpyrifos
. These four pesticides were known to causecancer, damage to the nervous and reproductive systems, birth defects, and severe disruptionof the immune system.In reaction to this report, the Indian government banned Coke and Pepsi products in theParliament and state governments launched independent investigations.
Such huge accusations made above had a drastic effect on not only the sales of these twobeverage giants but also on the brand image and reputation of the company. The sales of thecompanies plunged down to 30%-40% over the next two months. Such a downfall waswitnessed at a time when under normal conditions both these companies were recording a75%-80% sales growth rate. Such optimum sales conditions were completely reversed and thecompanies witnessed fall in sales for the first time in the Indian market, moreover, the effect of the catastrophe in India was also seen in the New York Stock Exchange, thus triggering globalchanges and effects.Under such a stressful situation, both Pepsi and Coke came together and took an immensely
position. They claimed that the reports by CSE were false, and that they wouldpersonally have their products checked, and the results would be published in their respectivewebsites. They also threatened the Quasi-govt. body of legal actions and vowed to move courtif the self-contested tests showed results contrary to those of the CSE.
It was of immense important for both these companies to regain their market position as far astheir sales figures were concerned. Moreover, they had to check their tarnished image and re-create the image that they had enjoyed in the pre-fiasco period. The situation was worse for