Protests Against Coca-Cola's Kinley plant in Manjhapetty, Kerala
Boby Kurian
Business Line
March 18, 2004

Bangalore - After being forced to halt operations of its soft drinks plant at Plachimada near Palakkad, following allegations regarding misuse of groundwater, Coca-Cola's bottled water business in Kerala is hit by an agitation on the same issue.

NeST Foods & Beverages, Coca-Cola's ally in the State, which manages Kinley, has suspended operations of its plant near Perumbavoor in Kochi district even as a local village welfare standing committee - in the wake of mounting political pressure and accusations about it depleting the water table - passed a resolution recommending ban on the use of groundwater for Kinley.

The Vazhakulam panchayat committee now wants an expert panel to look into the allegation of misuse of groundwater by the NeST plant before giving a final ratification to the standing committee's move to ban drawing groundwater. NeST's bottled water plant employs about 100 people and has roughly equal number of workforce involved with the distribution of Kinley brand.

NeST sources claimed that the company's plant was being targeted as part of the "ongoing vilification campaign" against Coca-Cola in the State.

"Our plant in Manjhapetty (near Perumbavoor) is not located in an area notified by the groundwater authorities. The charge that we are drawing between 1.5 to two lakh litres of water daily is absurd. The fact is that in our three years of operations, Kinley's average daily sales has never crossed 30,000 litres," a NeST official told this newspaper.

The local pressure groups have also been accusing that NeST plant supplied tanker loads of water to Coca-Cola's recently closed soft drinks plant at Plachimada.

Even as NeST officials claim that groundwater issue is being raised as a bogey to leverage on the labour disputes involving casual workers, both Coca-Cola and its ally have been at the receiving end of local media reports for several months now.

Sources said the focus of agitation shifted to NeST and its franchisee operations for Kinley after media reports (Business Line, February 7) that Coca-Cola would look at exiting the State after handing over the Plachimada plant to the local partner.

Last month, the Government of Kerala told Coca-Cola that villages in the Plachimada area were facing an acute drought and that the soft-drink company should not use groundwater until June 15. This followed a High Court order in December instructing Coca-Cola to stop using local groundwater.

The company has denied allegations it is affecting the local environment and the State had imposed ban only on Coke without any scientific proof even as nearly 30 other factories in the area continue to draw groundwater without any governmental curbs.

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