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US lobbies for Coke, Pepsi

A top trade official, in a letter written to the Indian government, seeks a level playing field for the beverage giants, report KA Badarinath and Nilova Roy Chaudhury.

india Updated: Sep 13, 2006 02:11 IST
KA Badarinath and Nilova Roy Chaudhury
KA Badarinath and Nilova Roy Chaudhury

The United States has sought a “level-playing field” for Coke and Pepsi, whose sales have been completely banned in Kerala. The soft drink majors have also been barred from selling their products in schools and government offices in five other states.

US Under Secretary for International Trade Franklin Lavin has requested the Indian government to “ensure a level playing field for these companies – Coke and Pepsi”.

US Embassy spokesperson David Kennedy said, “I can confirm that Under Secretary Lavin has written a letter a couple of weeks back, probably during third or fourth week of August, 2006 (on this issue)”.

However, Commerce Secretary S.N. Menon said, “I am not aware of any such letter. We have not received one. In any case, we do not deal with investment related issues.”

Secretary for Industrial Policy and Promotion Ajay Dua stated, “I have not received any such letter from the US government.”

These denials gave a fresh twist to the debate on this issue.

While Pepsi and Coke officials refused to comment, soft drinks industry sources said they were “not aware of any such letter”.

The US sees the partial ban on Coke and Pepsi as a foreign investment issue.

Apart from Kerala, four states – Punjab, Karnataka, Madhya Pradesh and Rajasthan – have banned the sale of Coke and Pepsi in schools and government offices.

The ban came after research findings of the Centre for Science and Environment (CSE), a Delhi-based NGO, were made public.

The CSE report claimed that the pesticide content in both Coke and Pepsi samples was far higher than the permitted level.

Both Coke and Pepsi account for 99 per cent of the country’s soft drink industry. They have a combined sale of Rs 7,000 crore per year.

After some states banned their products, the sale of Coke and Pepsi dropped by an estimated 10-15 per cent from the first week of August.

First Published: Sep 12, 2006 14:28 IST