Coca-Cola Abandons Expansion Plans in India

CompanyHas Been Planning a Major Expansion Pushwith a Major New Bottling Plant in India Until Hit with Water Problems

The All-American soft drink maker was hoping to expand production in the country, however, they have now abandoned their fizzy, bubbly ship.

Expansion was focused on alarge factory in Mehdiganj, near Varanasi, India. Though the deal seemed mutually beneficial to locals and the brand initially, Coca-Cola was soon hit with regulatory issues and protesters. The plant requires heavy water supplies, includingdrilling into groundwater reserves. The protesters called this an "over-exploitation of ground water."Since the plant opened, groundwater levels dropped 26 feet.

The Coca-Cola plant in Mehdiganj first opened in 1999 and the recent expansion cost an additional$25 million. While this money would certainly boost the local economy, the environmental dangers were too much for many locals. The protests have been going on for almost a year, as activists urged the government to dismiss the expansion out of water pollution concerns.

Hindustan Coca-Cola offered this statement to Alok Ranjan, the Chief Secretary of the Uttar Pradesh government,as obtained by Economic Times, "Due to inordinate delay in receiving of the no-objection certificate, causing delay in expansion of capacity, leading to financial losses, we have decided not to pursue the expansion at Varanasi."

The India Resource Center, which has led theprotests, was thrilled with the regulatory issues Coca Cola ran into. "We are delighted that the (Union) government is doing what it is supposed to do — protect the common property resource of groundwater from rampant exploitation, particularly in water-stressed areas,"

Source: The Wire

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