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Business News/ Companies / People/  Tamil Nadu cancels land allotment to Coca-Cola bottler

Tamil Nadu cancels land allotment to Coca-Cola bottler

The company has informed the state government that it will not be able to invest in SIPCOT land

The state government had signed a pact with the Hindustan Coca-Cola in 2013 to set up the bottling facility with an investment of `500 crore.Premium
The state government had signed a pact with the Hindustan Coca-Cola in 2013 to set up the bottling facility with an investment of `500 crore.

Chennai: The Tamil Nadu government on Monday night cancelled the land allotted to Hindustan Coca-Cola Beverages Pvt Ltd at Perundurai in Erode district to set up its bottling facility.

State Industries Promotion Corp. of Tamil Nadu (SIPCOT) Ltd, the state body that allotted the land, had asked Hindustan Coca-Cola in a 16 April letter to respond to the farmers’ concerns about water depletion if the facility is set up.

But since the company did not respond, the Tamil Nadu government has cancelled the approval on 20 April night, said a government official.

Hindustan Coca-Cola is the largest bottler of Coca-Cola India and is part of the brand’s Bottling Investments Group (BIG) that packages, sells and distributes the beverages.

Meanwhile, the company on its part too has informed the state government that it will not be able to invest in SIPCOT land. “The company has written to the state government that due to unforeseen pressures and delays, it will not be able to invest in SIPCOT, Perundurai," said Hindustan Coca-Cola in a press statement.

The state government had signed a pact with the Hindustan Coca-Cola in 2013 to set up the bottling facility with an investment of 500 crore. In 2014, the government alloted 71.3 acres of land at Perundurai for the facility that was supposed to produce Coca-Cola beverages and mineral drinking water Kinley.

But work to set up the facility was delayed as Hindustan Coca-Cola did not get mandatory approvals and permissions from the government despite repeated follow-ups.

This included a draft copy of the ‘water agreement’ to procure water from the New Tirupur Area Development Corp. Ltd (NTADCL), approval to lay water line from the SIPCOT entrance to the alloted site for which money was paid and an approval to lay effluent transfer line from Plot FF7 to KK8, according to the press release.

“Without these, we are unable to apply for ‘Consent to Establish’ and start construction work on the site. Despite sending repeated reminders to SIPCOT but there has been no progress. These inordinate delays, coupled with local activism against the project, could not have been foreseen nor prevented by us," said the company statement. The company said it has now requested the state government to refund the entire money paid so far for the facility.

Over the last two years, the farmers and residents of the 10 villages in and around the area have been protesting against the facility. They alleged that the unit will use 2 milllion litres of water a day and this would affect groundwater level in the area. The villagers also said that the discharge from facility will pollute the water resources.

On 5 March, residents along with all the political parties except the ruling All India Anna Dravida Munnetra Kazhgham had observed a one-day strike in protest against the proposed facility.

The groundwater resources in Perundurai have been declared as “over-exploited" by the government, a category indicating the worst degree of groundwater depletion.

‘Great victory’

“This is a great victory for the people of Perundurai, we put all our efforts to stop Coca-Cola and we have succeeded. Now we will focus on the other polluting industries in the area so that we can bring back the good air, land and water for our people", said V. M. Kandasamy, chairperson of the Perundurai Environment Protection Trust.

“Perundurai is one of India’s most polluted places, and we were determined that we do not want another highly polluting company like Coca-Cola to come here", said Myilsamy Murugasamy, an activist from Perundurai who was key in bringing national and international allies, including the India Resource Center, to the campaign.

Another Coca-Cola bottling plant, located about 150 kms west of Perundurai in a village called Plachimada in Kerala, was closed by the state government authorities in 2004 because of rampant toxic pollution by the Coca-Cola bottling plant. The company currently faces legislation holding it liable for $47 million in damages as a result of its operations.

“We were made aware of the dangers of Coca-Cola through the campaign in Plachimada where the company had contaminated the land and water, and depleted the groundwater. After learning about the issues, we decided that we did not want Coca-Cola in our area", said C. Velusamy, a key organizer with the Perundurai Environment Protection Trust.

Previous rejections

The rejection of its proposed bottling plant in Perundurai is a major setback for Coca-Cola in India as it tries to expand aggressively to compensate for rapidly declining sales in the industrialized countries.

In August 2014, Coca-Cola was forced to abadon a fully built $25 million bottling plant in Mehdiganj in Uttar Pradesh because the government rejected its application as a result of community pressure.

In April 2014, another proposed Coca-Cola bottling plant—in Charba in Uttarkhand state—was rejected due to community opposition.

The company also faces significant opposition in various parts of India where it has located its bottling plant in water-stressed areas, and challenges to Coca-Cola’s bottling operations are expected to grow as water conditions deteriorate across the country.

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Published: 21 Apr 2015, 07:09 PM IST
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