Pepsi Moves Kerala High Court Against Government Ban
Times of India
August 18, 2006

NEW DELHI: PepsiCo on Thursday approached the Kerala High Court against the Kerala government's order banning the production and sale of Pepsi. Coca-Cola is expected to follow suit and challenge the order.

PepsiCo filed the petition soon after it received the state government's order, saying that no reasons had been assigned for the ban.

"We received the order on Thursday where no grounds have been stated," said PepsiCo India chief Rajiv Bakshi. A Coca-Cola executive, however, said the ban was under the Prevention of Food Adulteration law.

Kerala accounts for just 1% turnover of the cola companies. Though a decision on the ban had been taken by the Kerala cabinet last week, the order reached Coca-Cola and PepsiCo on Thursday.

Company executives said the ban was only on sale of Coke and Pepsi and they were free to manufacture and sell other brands like Mirinda, Fanta, 7Up, Mountain Dew and Sprite.

Following a Centre for Science & Environment report saying that soft drinks contained high levels of pesticides, the state banned production and sale of the two drinks on the grounds that they posed a health risk, a charge that Pepsi and Coca-Cola have denied.

Coca-Cola has been in trouble in the state for the last few years on charges that its bottling plant in Plachimada had resulted in depletion of ground water.

While the company's unit is lying idle, PepsiCo's plant in Kanjikode is functional. Executives in the two companies said they had invested in the state following invitation from the government and the move affected their right to sell and manufacture soft drinks.

At least half-a-dozen states have imposed restrictions on the sale of soft drinks but Kerala's decision has been most severe, though West Bengal, has decided against a ban.

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