Indian ban on Coke and Pepsi widens

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Coca-Cola and PepsiCo faced mounting pressure yesterday when two more Indian states banned the sale of their soft drinks at government-run schools, colleges and hospitals over allegations they contain high levels of pesticides.

Karnataka and Andhra Pradesh joined five other states in banning the sale of Coke, Pepsi, Sprite and other drinks made by the Indian subsidiaries of Coca-Cola and PepsiCo.

Two other Indian states, Punjab and Arunachal Pradesh, said they were looking into the matter after a New Delhi-based research group said last week the soft drinks had pesticide levels that far exceed national standards. Both US companies insisted their drinks were safe.

India's top business groups warned the bans would deter foreign investors and urged ministers to review their decisions.

The southern Indian state of Kerala announced on Wednesday it would impose a total ban the sale and production of soft drinks by Coca-Cola and PepsiCo's Indian subsidiaries. Both companies operate plants in Kerala. Earlier, sales bans were imposed by the states of Rajasthan, Gujarat, Madhya Pradesh and Chattisgarh.

The Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry, which together account for more than 90 per cent of Indian businesses, said the bans could hurt the economy.

Both groups said the states should have conducted their own tests and sent notices to the companies before announcing the bans. They came after the Centre for Science and Environment said last week its tests on 57 samples of soft drinks made by the US giants revealed they contained residues of pesticides 24 times higher than Indian standards allowed. It said almost all soft drinks sold in India contain high levels of pesticides, but it focused on Coca-Cola and PepsiCo because the two account for nearly 80 per cent of India's $2bn (£1bn) soft drinks market. The companies issued a joint statement last week saying both "comply with stringent international norms and all applicable national regulations".