The Significant Facts
Until 1977, Coca-Cola Company was one of the best companies in the Indian manufacturing industry. Coca-cola is one of the foreign companies in India that fair well in the manufacturing industry. The main reason why the company quit its operations in India in 1977 was to avoid disclosing its secrets to the Indian government concerning its manufacturing activities. The company was also not willing to cut down its equity share as demanded by the Foreign Exchange Regulation Act of (FERA) of India (Coca-Cola India, n.d., p. 3).
The company made came back to India in 1993. It returned with a different formula that would see it capture the greatest share of the Indian soft drink market. Coke India manufactures brands such as Citra, Limca, Maaza, and Gold Spot. These brands are very much preferred by the Indian consumers of soft drinks. Other brands that the company manufactures in India include Sprite, Fanta, Diet Coke, Scheppers, Kinley water, and very many energy drinks (Coca-Cola India, n.d., p. 4).
Coke-India has invested a great amount of capital in this business. For instance, in the period between 1993 and 2003, the company invested close to US$1.2 billion. This was a very huge investment and so, the company was regarded as one of the top foreign investors in India. During this period, the company recorded a 39% growth. It is believed that this company contributed greatly to the 23% growth of the Indian manufacturing industry realized in 2002 (Coca-Cola India, n.d., p. 4).
Coke-India is purely a local company, which produces its brands locally. The company manufactures these brands in such a way that they reflect the tastes, cultures, and lifestyles of the Indians. The company has created quite several employment opportunities for the local citizens. It offers more than 11,000 direct employments and about 124,000 indirect ones to the citizens of India. The indirect job opportunities are created in the process of supply, procurement, and distribution (Coca-Cola India, n.d., p. 25).
The Major Ethical Issue that affected Coca-Cola India
The major ethical issue that rocked the Coke Company in 2003 was caused by the findings of the Center for Science and Environment (CSE). In 2003, the Indian government asked the CSE to conduct a test on Coca-Cola soft drinks. The research body was to test the drinks for major toxic insecticides and pesticides. The toxic components that were tested included Malathion, DDT, chlorpyrifos, and lindane (Coca-Cola India, n.d., p. 14).
The CSE found out that the Coke brands had high concentrations of pesticides as well as insecticides. The results indicated that the average concentration of the two substances in the brands was 0.0150 mg/l. This was about a 30% deviation from the standards set by European Economic Commission (EEC) (Coca-Cola India, n.d., p. 16).
Following the CSE results, it is evident that Coca-Cola India is selling harmful food substances to consumers. Pesticides and insecticides can accumulate in the body fat and remain there for a long time. The two substances have a long-term effect. For instance, they can cause heart failures and serious infections to other human organs (Coca-Cola India, n.d., p. 17).
Suggested Resolutions to the Ethical Issue
The Coca-Cola Company needs to lay down strict quality monitoring procedures that will ensure that water used in the manufacturing of the brands is free of pesticides as well as insecticides. This would mean that the company should set up its laboratories in which it can test for the traces of those substances. If it chooses not to use this strategy, the company can also test its raw materials and finished products in independent laboratories, which will be quite expensive (Coca-Cola India, n.d., p. 24).
The company should ensure that its brands are in line with the international high standards such as those of EEC set for soft drinks. It can achieve this by regularly upgrading its systems of quality management and manufacturing processes. The upgrading of the machines should be done after every six months. This will help in minimizing the levels of these substances which might have been accumulated within the machines (Coca-Cola India, n.d., p. 25).
Lastly, the company could also incorporate barrier systems within the manufacturing process. The barriers would help to block and remove all the unwanted substances including pesticides and insecticides from reaching the finished products. After the insertion of such barriers, they will remain permanent within the system (Coca-Cola India, n.d., p. 24).
The three alternatives suggested are effective ways through which the company can minimize the traces of insecticides as well as pesticides from its brands. However, the creation of gadgets to bar the traces of such elements from reaching the finished products is the best solution. It is cost-effective and the inserted barriers will be used for a long duration. In other words, it is a permanent solution. The other two solutions are not cost-effective. Building of high standards laboratories would be so expensive for the company and therefore will increase the cost of production. There are no international set standards for soft drinks.
References
Class Notes (n.d.).
Coca-Cola India (n.d.).