Case Study 1: Coca-Cola India

Case Study 1: Coca-Cola India

NAME XXX

Business Ethics (BMGT XXX)

XX XXXXXX 20XX

Professor Kenny Powers 

To: Senior executive of Coca-Cola, India

From: Douche Bigelow

Re: Ethical Issues Facing Coca-Cola India

I. Facts

On August 5, 2003, Coca-Cola India was attacked by the Center for Science and the Environment (CSE) through a claim that twelve of their soft drink brands in the Delhi area contained pesticide residues. These attacks on Coca-Cola were based on the CSE’s tests in the Pollution Monitoring Laboratory earlier in 2003. The tests concluded that three samples of 12 PepsiCo and Coca-Cola beverages had pesticide residues that exceeded standards by up to thirty-six times. These pesticides included lindane, DDT, malathion, and chlorpyrifos, which can cause cancer, birth defects, and immune system disruptions among other symptoms.

In Parliament, the Indian government quickly banned both Coke and Pepsi products in response to the reports. Soon after, state governments began initiating their own localized testing for impurities while Coca-Cola stocks fell from $55 to $50 per share. On the other hand, similar products in the United States contained none of these pollutants so Coca-Cola became skeptical of the CSE’s allegations. The Indian train of thought against American products is reminiscent of the 1970s when the Janta party achieved power and forced Coca-Cola out of the country. The Liberalization mindset is still a large part of Indian culture and citizens of India can be easily persuaded against foreign goods. The final verdict was that Parliament would ban sale of these soft drinks. Additionally, the majority of Indian consumers approved of their decision.

Coca-Cola should not receive all the blame, though. Prior to this incident, there was no regulation governing acceptable levels of pesticides in relation to soft drink production in India. The Indian government procures its standards from the international community via the European Union...