PepsiCo, Coca-Cola Spurned in Southern India in Fight Over Water

  • Retailers in drought-hit Tamil Nadu stop sales of the sodas
  • Boycott risks marring PepsiCo Chairman Nooyi’s visit to India

Retailers in India’s drought-hit southern state of Tamil Nadu stopped selling PepsiCo Inc. and Coca-Cola Co.’s sodas on Wednesday alleging that the companies were depleting ground water.

About 70 percent of the 1.5 million members of the local retailers association who stock carbonated drinks have stopped selling the two brands, A. M. Vikkramaraja, president of the group, said in a phone interview on Thursday. His association plans to convince all the members to boycott the drinks, he said. PepsiCo and Coca-Cola declined to comment on the matter.

The boycott mars PepsiCo Chairman Indra K Nooyi’s visit to India even as a court in the state dismissed a petition on Thursday against supplying water to the two companies. Water is an emotive subject in Tamil Nadu, which has been battling its neighboring state Karnataka for a share from the Cauvery river for years. Nooyi, who was born in Tamil Nadu’s capital, Chennai, is visiting India to discuss investment proposals with Prime Minister Narendra Modi.

Lobby group Indian Beverage Association said it is "deeply disappointed” by the call to boycott products of multinational beverage makers, saying it goes against Modi’s call to companies to “Make in India.” The Madras High Court on Thursday dismissed two petitions seeking to block the companies from tapping water from the Tamiraparani river in Tamil Nadu.

Of the 6,607 areas assessed in India to check groundwater developments, 1,071 areas were categorized as “over-exploited,” according to federal government data released on Dec. 1.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE