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Behind the Coke-Pepsi Pesticide Scare

Is India unfairly targeting the soft drink titans because they're outsiders?

Fearless researchers nail two big, bad American multinationals selling toxic soda to India's masses? Get Bollywood on the line! Unfortunately for Coca-Cola (KO) and PepsiCo (PEP), this scenario isn't a film pitch. An anti-corporate lynch mob has pursued the pair of soda makers since Aug. 9, when a New Delhi environmental group released data purporting to show their soft drinks contain levels of pesticides that greatly exceed proposed Indian safety standards. In response, several Indian states banned sales of Coke and Pepsi.

If the companies have been negligent, of course, they deserve to be punished. But so far it appears that they have been singled out because they are foreign-owned. No Indian soft drink makers have been tested for similar violations, even though many people believe that pesticide levels are even higher in Indian-made milk and bottled tea. And while pesticide residues are present in virtually all groundwater in India, New Delhi has largely ignored the problem. "We are continuously challenged because of who we are," says Atul Singh, CEO of Coca-Cola India.