Home >Companies >Coca-Cola stops making drinks at Andhra Pradesh, Meghalaya, Rajasthan units

New Delhi/Chennai: Coca-Cola has halted manufacturing at three plants in India temporarily on lower sales, company officials said Thursday, as the US giant faces challenges from activists over alleged depletion of groundwater.

Nearly 300 people work at the three plants in the states of Andhra Pradesh, Meghalaya and Rajasthan, where activists have waged a more than decade-long battle against the fizzy drinks company.

“Manufacturing at three units have been temporarily suspended," Kalyan Rajan, spokesman for Hindustan Coca-Cola Beverages, which bottles drinks in India for the US giant.

Fifty four plants produce fizzy drinks in India for Coca-Cola, which had been eyeing expansion in the world’s second most populous country where income levels are rising.

“For some time the market has not been good for the beverage industry in India owing to multiple factors," Kamlesh Sharma, spokesman for Coca-Cola India, a subsidiary of the giant, told AFP.

Sharma said the factory in Kaladera in Rajasthan did not close because of activism. And he denied the plant had depleted the water table, saying it tapped only a small share.

The company has faced strong resistance in Kaladera from groups who say it has diverted already scarce water meant for farmers and their fields.

“There is no water in Kaladera. We have to dig 400 to 500 feet (122 to 152 metres) to get water. Two decades ago it was 100 feet," Mahesh Yogi, of local activist group Kaladera Sangharsh Samiti, told AFP.

The Atlanta-based company, which has said it plans to invest $5 billion in India by 2020, has faced a string of objections over the years from local communities over water use.

Last year, it dropped plans to open a new bottling plant in southern Tamil Nadu state over protests by locals who also claimed it would rob them of groundwater.

In 2014, it scrapped expansion of an existing plant in northern Uttar Pradesh state after authorities denied permission on local protests.

A study of some of Coca-Cola bottling plants in India by The Energy and Resources Institute (Teri) in 2008 had recommended closure of the Kaladera plants because its operations “would continue to be one of the contributors to a worsening water situation and a source of stress to the communities around."

Campaigners against the Coca-Cola plant welcomed the move to stop production.

“We have campaigned for shutting the plant and we welcome the closure," said Mahesh Yogi of the Kala Dera Sangharsh Samiti, a local group that has led the campaign. “However, Coca-Cola must also be held accountable for the damages it has caused to the farmers, to the watershed and to the community," he added.

Rameshwar Kudi, a retired government official who led the local campaign to shut the Dera Jan Sangharsh Samiti plant, welcomed the plant closure but remained concerned about who will be held responsible for the loss of earnings for thousands of farmers in the area who were unable to farm successfully as the groundwater levels dropped sharply.

The company said like any other manufacturing organization, it was going through a process of consolidation where new state-of-the art facilities are being built and existing production capacities are being optimized.

Therefore, decisions are taken in keeping with facility capacity utilization considerations, based on the market demands and projections, said the company. A unit’s capacity also becomes viable or unviable on the basis of the availability of raw materials, said a company in the press release.

“We have always known that Coca-Cola’s plant in Kala Dera would shut down one day because it would run out of water, as it has now. We would have preferred that Coca-Cola have acted responsibly and never operated in a highly water stressed area, or at the very least, shut down the plant when its own study asked it to eight years ago," said Amit Srivastava of the India Resource Center, which has campaigned internationally to bring pressure on Coca-Cola for water mismanagement in India, in another press release.

The bottling major, however, said it has retained the licence to produce at this unit, which is testimony to the fact that should there be a change in demand and volume, “we may utilize this latent capacity at the Kaladera Plant".

“We are also committed to continuing with the community and the rain water harvesting work that we have been doing since 2003," said the company.

Last year, the Tamil Nadu government cancelled land allotted to Hindustan Coca-Cola Beverages at Perundurai in Erode district to set up its bottling facility.

Another Coca-Cola bottling plant, located about 150 km west of Perundurai in a village called Plachimada in Kerala, was closed by state government authorities in 2004 citing toxic pollution caused 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.

In August 2014, Coca-Cola was forced to abandon 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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