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Coca-Cola India: Is It an Eco-friendly Company?*

CASE STUDY, CORPORATE SOCIAL RESPONSIBILITY
ET Cases - FLAME, 8 Pages
AUTHOR(S) : Omkar Pimpale, Sanket Gosavi, Sneha Shanmughan, Shashank Chakraborty, Post Graduate Students and Abhijat Arun Abhyankar, Senior Associate Professor - National Institute of Construction Management and Research, Pune

Case Preview

Coca-Cola India: Is It an Eco-friendly Company?

One fine day, Ms. Asha Gupta (Asha) a resident of Madhya Pradesh was reading the newspaper while having a cup of tea, when she came across the news regarding expansion of Coca-Cola Company. The news stated about opening a bottling plant in Madhya Pradesh. This aroused Asha’s curiosity, being a sceptical and rational person, she decided to do her own research before forming an opinion. She was an active volunteer of an NGO called ‘Drop’, which worked in the field of water conservation and harvesting.

When she started her research, Asha realized how little idea we possess about the items of our daily consumption. She found that Coca-Cola was invented in May 1886 in Atlanta, Georgia, by a pharmacist known as John Pemberton (Pemberton).1 She learned that, after testing and sampling the product, a mix of liquid caramel, Pemberton suddenly realized that he made a sort of unique beverage. The pharmacist’s managerial assistant, Frank Robinson, christened the drink as ‘Coca-Cola’. This lead to the Coca-Cola trademark which remained the same throughout these years. Coca-Cola’s portfolio had popular products such as Coca-Cola, Fanta, and Sprite among various others that were developed and acquired over the years. Its operations spread across 200 countries. Coca-Cola employs around 700,000 people, including staff of the bottling company. It has over $105 billion system revenue and $20 million in operating cash flow, making it one of the world’s strongest system. The concentrate produced by Coca-Cola Company would be sold to licensed Coca-Cola bottling plants across the world. The bottlers add filtered water and sweeteners to the concentrate and produce the finished product in cans and bottles. The ingredients recipe of a regular 12 US-fluid-ounce (350 ml) would have 38 grams (1.3 oz) of sugar (usually in the form of high fructose corn syrup).2 Coca-Cola would then be sold, delivered, and merchandised to retail stores, restaurants and vending machines in areas under their exclusive territory contracts with the company. The Company also sells concentrate for soda fountains of major restaurants and food service distributors................

Case Study I: Plachimada, Kerala

The experts from IIM Indore opened the discussion by presenting a thorough history of Coca-Cola’s operations. During research about the history of protest and opposition related to Coca-Cola, they came across a particular problem from Kerala in 2004. A study from the Agricultural University found that fodder, milk, meat and  egg samples collected from the Plachimada area (Palakkad, Kerala) contained copper, cadmium, lead and chromium at levels considered toxic by World Health Organisation (WHO) standards. The company had also been involved in a controversy where groundwater resources had been declared as “over-exploited” by the government.....................

Case Study II: Kaladera, Rajasthan

A Coca-Cola representative, Sunil Sharma, admitted in a particular interview with a reporter that the plant used about 0.15 million cubic meters (mcm) of water last year, but claimed that Coca-Cola has also been regenerating, through 19 shafts in Kaladera, even more ground water than it extracts.8 He also argued that the fall had been more drastic elsewhere. The Coca-Cola plant’s extraction in Kaladera has contributed acutely to an already unfolding water crisis. The anti-Coca-Cola struggle there raises questions about the sometimesthoughtless investment allowed under the ideological mantra of ‘industrialization’...............

Case Study III: Perundurai, Tamil Nadu

The setback to Coca-Cola in Tamil Nadu, in which the state government cancelled the allotment of land to the company at an industrial complex at Perundurai in Erode district because of local opposition, is yet another example of community vigilance protecting precious natural resources. The company was set to establish INR500 crore bottling plant with water from Cauvery River. They also noted that Coca-Cola has Water Stewardship policy, which is nothing but a water conservation policy..............

Fundamental Impacts

Environmental Impact

Having taken the above facts in consideration, the environmental experts from IIFM presented their points regarding its impacts on environment. Secretary to the Ministry of Environment and Forest Mr. Srivastava’s quote cast doubt on bottling factories. He suggests that “in the nine years prior to Coca-Cola’s bottling operations in Kaladera, groundwater levels fell just 3 meters and in nine years since Coca-Cola has been operating in Kaladera, the groundwater levels have dropped 22.36 metres”..............

Economic Importance

Then the bureaucrat from the Ministry of Labour presented his agenda about how opening of bottling plant in Madhya Pradesh will help in employment and indirectly overall financial development. Coca-Cola Company worldwide employs approximately 700,000 people. Opening a bottling facility would boost employment opportunities for the public. Not only bottling and processing but allied industries like logistics and supply chain, food processing would require more people as well.................

Health Effects

To contrast this situation, experts from the Medical Council of India (MCI) argued that Coca-Cola contains 10.6 gm of sugar per 100 ml which amounts to 26.5 gm (equivalent of five-and-half teaspoons) in a 250 ml can. “The representatives of public organizations demanded high taxes on carbonated drinks,” a top health ministry official aware of the development said on conditions of anonymity...............

Conclusion

Ever since Coca-Cola began its second innings in India in the late 90’s, the multinational has been embroiled in controversies. This case study chronicles such major controversies, starting with Plachimada in Kerala, Kaladera in Rajasthan and land acquisition row in Tamil Nadu among others. Though Coca-Cola has immense amount of capital at its disposal and industrialization brings prosperity is a known fact, the case focuses on how far is the willingness to industrialize at the cost of environment......................

Exhibits

Exhibit I: Employment Generation by COCA-COLA

Exhibit II: Agitation in Plachimada, Kerala

Exhibit III: History of Controversies in Recent Times in Different States

Exhibit IV: Presence of Heavy Metal in Finished Products Detected

Exhibit V: Groundwater Depletion in Kaladera, Rajasthan

Teaching Note Preview

Coca-Cola India: Is It an Eco-friendly Company?

Synopsis

Coca-Cola India Pvt. Ltd. is the Indian subsidiary of Coca-Cola, a U.S. Company based in Atlanta. Water is the primary component used by the company for manufacturing its products. There have been agitations against Coca-Cola subjected to severe water shortages faced by the community. They were accused of using large quantities of water for production, affecting the quantity and quality of surface and underground water in Kerala, Uttar Pradesh, Tamil Nadu, and Maharashtra among other states. Many national, international groups and political parties along with extensive media coverage supported this cause. The Central Pollution Control Board of India reported that sludge from these factories had alarming levels of heavy metals like cadmium, lead, and chromium.

In response, Coca-Cola said that ‘a small number of politically motivated groups’ are going against the company ‘for the furtherance of their own anti-multinational agenda’. It refuses that its actions in India have contributed to depleting local aquifers, and calls these allegations invalid ‘without any scientific basis’. The case highlights the second dimension of this issue based on employment generation. Currently, Coca-Cola employs more than one lakh people in its bottling subsidiary called Hindustan Coca-Cola Beverage (HCCB). Should Coca-Cola be allowed to further expand their operations?

Case Positioning and Setting

This case can be used for teaching at Post Graduate Level, applicable to following courses:

• Environmental Management
• Water Resource Management
• Waste Management
• Environmental Law

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$5.48
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Product code: CSR-1-0015, CSR-1-0015A

Abstract

Coca-Cola India Pvt. Ltd. is the Indian subsidiary of Coca-Cola, a U.S. Company based in Atlanta. Water is the primary component used by the company for manufacturing its products. There have been agitations against Coca-Cola subjected to severe water shortages for the community. They were accused of using large quantities of water for production which was affecting the quantity and quality of surface and underground water in Kerala, Uttar Pradesh, Tamil Nadu, and Maharashtra among other states. Many national, international groups and political parties along with extensive media coverage supported this cause. The Central Pollution Control Board of India reported that sludge from these factories had alarming levels of heavy metals like cadmium, lead, and chromium.

In response, Coca-Cola said that ‘a small number of politically motivated groups’ were going after the company ‘for the furtherance of their own anti-multinational agenda’. It refuted all the allegations that its actions in India caused or effected to depletion of local aquifers, and claimed these allegations were invalid ‘without any scientific basis’. The case highlights the second dimension of this issue based on employment generation. Currently, Coca-Cola employs more than one lakh people in its bottling subsidiary called Hindustan Coca-Cola Beverage (HCCB). Should Coca-Cola be allowed to further expand their operations?


Pedagogical Objectives

  • To study the effects of Water Mining by Coca-Cola India
  • To understand the Waste Management strategies

Case Positioning and Setting

This case can be used for teaching at Post Graduate Level, applicable to following courses:

  • Environmental Management
  • Water Resource Management
  • Waste Management
  • Environmental Law


* 4th FLAME International Conference on Research and Teaching Cases, June 21st 2018 & June 22nd 2018



This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
$5.48
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