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Coca-Cola India’s Unsafe Products and Practices Case Study

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Updated: Jul 22nd, 2021

Introduction

For over a hundred years, Coca-Cola has been the most successful brand in the industry of soft drinks, being deemed the “Number One Brand in the World”. With its “Drink local, act local” mantra, the company wanted to achieve success in the Indian market (Coca-Cola India 5). However, along with success, the company faced a crisis in the recent decade.

A particular crisis is the Coca-Cola India case. In 2003, Coca-Cola India faced an attack by the Center for Science and Environment for the use of unsafe products that contained the residue of pesticides that did not match the world standards. The conducted tests had shown that the pesticides contained in the products were known to cause some serious diseases like cancer, immune system disruption as well as birth defects (Papyrina 3).

Another accusation related to Coca-Cola’s excessive water pumping. According to the Wall Street Journal, “numerous NGOs both inside and outside India accuse Coke, among other ‘crimes,’ of sucking local Indian communities dry through excessive pumping of groundwater” (Stecklow 37). Moreover, the protests against Coca-Cola I Plachimada, Kerala led to the local government shutting down of the plant in 2004 due to the statistics that had shown the ground water exploitation was approximately 2.47 (Saxena and Saxena 149). Despite the company arguing this decision and stating that “water to Coca-Cola as clean energy is to BP” the plant still remains closed (Coca-Cola in Hot Water 1).

Challenges on the Indian Market

Because of the attacks from the Center for Science and Environment and various Non-Governmental Organizations (NGO), Coca-Cola faced a variety of Challenges on the Indian Market. First, the company’s reputation as the most valuable brand in the world was greatly shaken. Thus, the primary problem was rebuilding a positive image and retaining the trust of the Indian customers.

However, rebuilding the trust was a difficult struggle because of NGOs having a high credibility among the public. Secondly, another problem was the Coca-Cola’s reputation in the States. In the States, the company flourished and developed, while in a developing country of India, Coca-Cola held very low standards. Shouldn’t the company hold the same standards and responsibilities around the world?

It is evident that when an organization is accused with bearing danger to the environment, its reputation is shaken. However, the reputation is not the most valuable aspect, the health and safety of the customers is what should go first. For example, the negative effects of the pesticides found in Coca-Cola products can harm their customers.

Because the company advertised their products with the help of proclamation of quality and superiority, the pesticide claims go against everything Coca-Cola had advertised. If the issues are not addressed by the company and the fixed, the customer base of the company will diminish along with the completely demolishing the reputation acquired with decades (Papyrina 4).

Solution to the problem

Coca-Cola’s solution to the problem was choosing to attack the Non-Governmental Organizations without realizing their high levels of credibility in India as well as around the world. Most often, the public chooses to take the side of an NGO rather than a multi-national organization when it comes to resolving a conflict. There was no alternative solution to the problem, for example, instead of attacking the findings of the CSE, Coca-Cola should have agreed with the power of the organization and collaborate. The company did not conduct any analysis of the alternatives before attacking the credibility of CSE and NGOs.

The suggested alternatives include the following solutions: collaboration with the CSE, the Status Quo, and the PR campaign. The first alternative, collaboration with the CSE, would be possible if Coca-Cola agreed with the findings and proceeded with a dialogue rather than stating: We are completely confident in the safety of our soft drinks in India because they are produced to the same level of purity, regarding pesticides, as the stringent EU criteria for bottled water (Statement Regarding the Safety of Our Soft Drinks in India 1). By agreeing to collaborate with the CSE, Coca-Cola could have conducted new tests together with the organization, which would have shown trust.

The second alternative, the Status Quo means ignoring the issue until all the media buzz goes away. After all, Coca-Cola is an organization that is targeted by many NGOs throughout the globe. However, this alternative has a major downside: ignoring a problem will never resolve it, and with the company’s reputation attack, Coca-Cola could lose a large bulk of the consumer base. The third alternative, a PR campaign would have to be tailored to the Indian market and offer free products or hold sponsored events. On the other hand, a PR campaign could be an argument in showing that Coca-Cola is a greedy corporation that only cares about the profit, not the environment or the consumers’ health.

Conclusion

After the analysis of the alternative options for developing a strategy in the Indian market, it is advisable for Coca-Cola to combine cooperation with the CSE and conduct a mutual research with a PR campaign that will be specifically targeted to the Indian market.

References

. 2005. Web.

Coca-Cola India. n.d. Web.

Papyrina, Veronica. . 2010. Web.

Saxena, Umesh and Swati Saxena. “Ground water quality evaluation with special reference to Fluoride and Nitrate contamination in Bassi Tehsil of district Jaipur, Rajastan, India.” International Journal of Environmental Sciences 5.1 (2014): 144-163. Print.

Statement Regarding the Safety of Our Soft Drinks in India. 2006. Web.

Stecklow, Steve. 2005. Web.

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IvyPanda. 2021. "Coca-Cola India's Unsafe Products and Practices." July 22, 2021. https://ivypanda.com/essays/coca-cola-indias-unsafe-products-and-practices/.

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IvyPanda. (2021) 'Coca-Cola India's Unsafe Products and Practices'. 22 July.

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