Village Council Rejects Coca-Cola License, Company Fined for Tax Evasion  

Made in India Coke Products Denied Entry into United States

For Immediate Release
June 14, 2005

R. Ajayan, Plachimada Solidarity Committee (India) T: +91 98471 42513
Amit Srivastava, India Resource Center E: amit(AT)IndiaResource.org T: +44 7731 865 591 (UK)

June 14, 2005 (London): Coca-Cola has been unable to obtain a license for one of its largest bottling plants in India, and the plant has remained shut down due to community pressure since March 2004.

In yet another major blow for the Coca-Cola company in India, the Perumatty panchayat (village council) on Monday rejected Coca-Cola's fresh application for a license to operate its factory for two years in Plachimada, in southern India.

The rejection of the license is the latest in a series of misfortunes for the company in India. Just last week, on June 6, the village council had offered Coca-Cola a license valid for three months and with thirteen conditions. The Coca-Cola company chose not to accept the license and the conditions, and instead, applied for a new, two-year license.

In an anti-democratic move, Coca-Cola has continued to challenge the authority of the village council, insisting that the council has no jurisdiction over the company's bottling plant located in the village. The company argues that the state of Kerala has the necessary authority and jurisdiction over its operations. The case is now scheduled to be heard in the Supreme Court of India.

The Coca-Cola bottling plant has remained closed since March 2004 because the village council has refused to renew Coca-Cola's license, citing the company for creating severe water shortages for the community as well as causing pollution of the groundwater and soil.

The local community has remained adamant that the Coca-Cola bottling plant cannot re-open. On June 8, a major rally took place outside the idle bottling plant, and over 500 people were arrested. "This is a major victory for the people of Plachimada and India," said R. Ajayan of the Plachimada Solidarity Committee of the village council's decision to not issue a license to the Coca-Cola company.

The Coca-Cola company has faced a series of protests against its proposed operations in Plachimada ever since the Kerala High Court directed the village council to issue a license to the Coca-Cola company on June 1, 2005. The anti Coca-Cola movement enjoys widespread support in the local community and the company faces an uphill task in trying to reopen its bottling plant in southern India.

Coca-Cola's complete disregard of Indian laws and practice of double standards continue to take its toll on the company in India.

On May 30, 2005, the Commercial Tax Department of Kerala fined the company Indian Rupees 3 million (approx. US$ 70,000) for tax evasion.

On May 19, 2005, a shipment of Coca-Cola products made in India and shipped to the United States was rejected by the US Food and Drug Administration (USFDA) on the grounds that they were unsafe and not conforming to US laws. Coca-Cola has been selling drinks in the Indian marketplace with high concentrations of pesticides, including DDT, sometimes higher that 30 times those allowed by US standards. The company maintains its products are safe in India.

"How can Coca-Cola sell products to Indians that are not allowed to be sold to Americans?" asked Amit Srivastava of the India Resource Center. "We need to remind Coca-Cola that India is not a country of guinea pigs to be experimented upon," continued Srivastava.

The Parliament of India, incidentally, has banned the sale of Coca-Cola in its cafeteria ever since the studies confirming pesticides were announced in September 2003.

For more information, visit www.IndiaResource.org


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