Coca cola water scandal

An ongoing drought has threatened groundwater supplies across India, and many villagers in rural areas are blaming Coca-Cola for aggravating the problem. Coca-Cola operates 58 water-intensive bottling plants in India.

What the Dasani Tap-Water Scandal Can Teach Investors

In the southern Indian village of Plachimada in Kerala state, for example, persistent droughts have dried up groundwater and local wells, forcing many residents to rely on water supplies trucked in daily by the government. Some there link the lack of groundwater to the arrival of a Coca-Cola bottling plant in the area three years ago.

Similar groundwater problems have plagued the company in the rural Indian state of Uttar Pradesh, where farming is the primary industry.

Several thousand residents took part in a day march in between two Coca-Cola bottling plants thought to be depleting groundwater.

Indeed, one report, in the daily newspaper Mathrubhumidescribed local women having to travel five kilometers three miles to obtain drinkable water, during which time soft drinks would come out of the Coca-Cola plant by the truckload. Citing excessive groundwater pumping, inIndian government officials ordered closed the Mehdiganj plant in the state of Uttar Pradesh.

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Since that time, Coca-Cola has undertaken a water replacement program, but unusually dry monsoons highlight the reality that water depletion continues to be a serious issue. Share Flipboard Email.

Selected EarthTalk columns are reprinted by permission of the editors of E.The companies had to deal with consumer backlash, but it turns out there was no reason for investors to panic. When scandal strikes, the first item on the agenda for investors is to evaluate the damage -- specifically, whether the core of the business operations are intact or if the revelation has done some permanent damage. In Coca-Cola's case, bottled water was and still is a side endeavor. When it was revealed that Dasani was not sourced from some special location, the subsidiary beverage business was still new.

Coca-Cola had launched the brand in In response to public outcry, Dasani and other bottled-water brands that source from a municipal water supply started to publish where they were getting their water and how it was treated. It was a potentially catastrophic blow for the fledgling bottled-water industry, and share prices fell at the time. However, because Dasani was merely riding sidecar to Coca-Cola's main carbonated-drink engine, the overall business continued to grow.

The first lesson learned is this: When a business you own suffers a PR mishap, consider how detrimental it will be to overall revenue and profitability. Has something fundamentally changed with how the company conducts business? If the answer is no, proceed to Step 2. Such was the case with Coca-Cola. Coca-Cola shareholders who panicked and sold during the Dasani debacle probably regretted the decision. The incident eventually blew over, and shares rebounded.

The fact that Dasani was nothing more than fancy tap water turned out to be just a bump in the road. And that leads to the second and more valuable lesson: When disaster seems to loom over a business you own, if the business remains strong, it could be a good time to buy more shares. Looking at the preceding chart but instead beginning in -- when Coke stock was beaten up following the Dasani brouhaha that started when it had to pull the water from shelves in the U.

It's also important to remember that public opinion can be quite fickle. What was once an issue is long forgotten, as Coke's bottled-water business has continued to grow into a big moneymaker over the years. The company's still-beverage segment, which includes water brands such as Dasani, speaks for itself:. Data source: Coca-Cola earnings reports. When a company you own is getting raked over the coals, it's important to do some digging before making a decision to sell.

If business operations remain intact, a rebound could be around the corner. Coke's Dasani tap-water scandal and the stock's ensuing performance is a perfect example.

Nicholas Rossolillo TMFnrossolillo. Jun 23, at PM. Author Bio Nicholas has been a writer for the Motley Fool sincecovering companies primarily in the consumer goods and technology sectors. He enjoys the outdoors up and down the West Coast with his wife and their Humane Society-rescued dog. Follow nrossolillo.Figures from independent beverage research company Canadean show that at least two out of every five bottles of water sold around the world are, like Dasani, "purified" waters, rather than "source" waters which originate from a spring.

Most of the supermarket own-label bottled waters consist of treated mains water. They may be dechlorinated, filtered further, purified using ultraviolet light and have minerals either added or subtracted. They may also be carbonated. In short, they are subjected to many of the same treatments that source waters undergo to satisfy public health requirements after being pumped up from the ground. Alongside flagship brands such as Evian, Perrier, and Malvern, most of the big-name water producers market several purified water lines, often in countries where the safety of the public water supply is a concern.

Nestle's Pure Life is one such leading brand and PepsiCo's Aquafina is another, while Danone's Sparkletts and Alhambra marques are top sellers in the United States, where mains water purity is not usually an issue. You also have mixed source waters, like Nestle's Aquarel, which comes from seven different springs. Such spring water is cheaper to produce and therefore to sell, and has proved a big hit with consumers in Europe and elsewhere.

But generally speaking, anything that doesn't say "source" or "spring" on the label is just fancy tap water. The origin of UK Dasani it's produced all around the world but is always purified rather than source water came to light when a complaint was made to the British Food Standards Agency over Coke's use of the word "pure" in its Dasani marketing.

The complaint, now being dealt with by the local authorities where Dasani is bottled in Sidcup, east London, hinges on the charge that the marketing implies that tap water is 'impure'.

As a market for bottled water, the UK is relatively immature. Britons consume an average of 28 litres of bottled water per year, compared with about litres for Italy and France. So the fact that bottlers take water, purify it further and sell it on can hit the headlines, especially if the water producers take a substantial mark-up in the process.

Like Nestle, McDonald's and Cadbury Schweppes, Coke makes a gratifying target for journalists, in that all those companies trade heavily on their brand. That makes them extremely vulnerable to criticism, as Coke already found to its cost with its failed "New Coke" launch.

coca cola water scandal

Coca-Cola's seven million pound marketing drive for Dasani has taken a savage hit, but the success of the brand in other countries, such as the United States where it is the number two seller, suggests it isn't about to go away. In the developing world you usually buy bottled water because it's clean, or because it doesn't taste of chlorine. In the west, it's a "lifestyle choice".

Most consumers in developed countries would accept that the water that comes out of their taps is clean enough and quite serviceable for cooking, washing or even drinking.Join forces with us against the root causes of global poverty, inequality and injustice.

Indian traders boycott Coca-Cola for 'straining water resources'

Coca-Cola is one of the most recognisable brands in the world. The company claims to adhere to the "highest ethical standards" and to be "an outstanding corporate citizen in every community we serve". Yet Coca-Cola's activities around the world tell a different story.

Coca-Cola has been accused of dehydrating communities in its pursuit of water resources to feed its own plants, drying up farmers' wells and destroying local agriculture. The company has also violated workers' rights in countries such as Colombia, Turkey, Guatemala and Russia. Only through its multi-million dollar marketing campaigns can Coca-Cola sustain the clean image it craves. The company admits that without water it would have no business at all. Coca-Cola's operations rely on access to vast supplies of water, as it takes almost three litres of water to make one litre of Coca-Cola.

In order to satisfy this need, Coca-Cola is increasingly taking over control of aquifers in communities around the world. These vast subterranean chambers hold water resources collected over many hundreds of years. As such they the represent the heritage of entire communities. Coca-Cola's operations have particularly been blamed for exacerbating water shortages in regions that suffer from a lack of water resources and rainfall. Nowhere has this been better documented than in India, where there are now community campaigns against the company in several states.

Coca-Cola established a bottling plant in the village of Kaladera in Rajasthan at the end of Rajasthan is well known as a desert state, and Kaladera is a small, impoverished village characterised by semi-arid conditions. Farmers rely on access to groundwater for the cultivation of their crops. Locals are increasingly unable to irrigate their lands and sustain their crops, putting whole families at risk of losing their livelihoods. Local villagers testify that Coca-Cola's arrival exacerbated an already precarious situation.

Official documents from the government's water ministry show that water levels remained stable from untilwhen the Coca-Cola plant became operational. Water levels then dropped by almost 10 metres over the following five years. Locals fear Kaladera could become a 'dark zone', the term used to describe areas that are abandoned due to depleted water resources.

Other communities in India that live and work around Coca-Cola's bottling plants are experiencing severe water shortages as well as environmental damage. Local villagers near the holy city of Varanasi in Uttar Pradesh complain that the company's over-exploitation of water resources has taken a heavy toll on their harvests and led to the drying up of wells.

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As in Rajasthan and Kerala, villagers have held protests against the local Coca-Cola plant for its appropriation of valuable water resources. In the now infamous case of Plachimada in the southern state of Kerala, Coca-Cola's plant was forced to close down in March after the village council refused to renew the company's licence, on the grounds that it had over-used and contaminated local water resources.

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Four months earlier, the Kerala High Court had ruled that Coca-Cola's heavy extraction from the common groundwater resource was illegal, and ordered it to seek alternative sources for its production.

In the independent Centre for Science and Environment tested Coca-Cola beverages and found levels of pesticides around 30 times higher than European Union standards.Natural supplies have run out in the indigenous town of San Felipe Ecatepec in the state of Chiapas, southern Mexico, meaning people must walk for two hours to fetch drinking water, one former local official said. Mr Urmano said people in the region had repeatedly asked both state and federal governments to install a deep well in the community for 12 years, to increase the community's access to water, but authorities had not done anything.

Climate change and outbreaks of salmonella have exacerbated the problem. Additionally we run programmes to replenish to communities and the environment the same amount of water we use in our beverages. Coca-Cola has previously come under fire in the country for the negative health impact of its sugary drinks. Mexico has high levels of obesity and more than 70 per cent of the population is overweight or obese. You can find our Community Guidelines in full here.

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Long reads.

Why You Can't Buy Dasani Water in Britain

UK Politics. Lib Dems. Green Party. Boris Johnson.

coca cola water scandal

Jeremy Corbyn. US Politics. Help The Hungry. Shappi Khorsandi. Mary Dejevsky. Robert Fisk. Mark Steel. Janet Street-Porter. John Rentoul. Matthew Norman. Sean O'Grady. Tom Peck. Andrew Grice.Campaigners in drought-hit Tamil Nadu say it is unsustainable to use litres of water to make a 1 litre fizzy drink.

Traders in the south Indian state of Tamil Nadu, which has a population bigger than the UK, will replace big brands with locally produced soft drinks. Concerns about excessive water usage by companies such as Coca-Cola and PepsiCo were heightened after low rainfall during the last monsoon. He says demand for sugar from fizzy drinks companies is also hugely problematic in India.

The Indian Beverage Association IBAwhich represents many soft drinks manufacturers, said it was disappointed with the boycott. The protests offered many citizens the opportunity to air their grievances publicly, and galvanised the fizzy drinks boycotts after farmers complained big companies were using up precious resources in the water-stressed state.

Coca-Cola Charged With Groundwater Depletion and Pollution in India

Raja said demand for fizzy drinks had dropped significantly since January, and many traders who were not part of his trade association had voluntarily stopped stocking foreign brands. This article is more than 3 years old. Vidhi Doshi in Mumbai. Published on Wed 1 Mar As literally one of the biggest companies on Earth, Coca-Cola has their giant fingers in a lot of equally giant pies. One of those fingers happens to be dipped in the extremely lucrative bottled water market.

coca cola water scandal

While Dasani sells exceptionally well in America, when the soda giant tried to market it in the UK, they not only insinuated in their official slogan that it was full of semen, but also accidentally introduced illegal amounts of a potential cancer causing substance during the filtration process.

The result was disastrous for the company, likely costing them several hundred million dollars in the UK alone since then, and putting a full stop on their previous plans to expand the brand to places like Germany and France. At the time, a half litre of water from said plant was selling for about 0. For reference, Dasani was put on the shelves at a price of 95p per half litre bottle- a hefty markup even considering bottling and transportation costs, as well as retail markup.

Unsurprisingly, after a article in The Grocer casually mentioned the tap water source of Dasani water, the wider media was soon whipped up into a frenzy. It should be noted here that Sidcup, where Dasani water in the UK was sourced, is only about ten kilometres from Peckham.

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You see, in the UK, spunk is slang for semen… This was even more humourous given that many of the advertising images featured models, who apparently never learned to drink water properly, splashing Dasani all over their faces.

Besides noting that the water was already purified, a spokesman from Water UK a company representing the various water companies in the UK also pointed out the real benefit of such bottled water which few, if any bottled water companies bother to mention in their marketing for obvious reasons:. Despite this, Coca-Cola once again doubled down on marketing their purification process, hoping that it would sway the public back to their side.

Unfortunately, the process they used to filter the water actually left it filled with about double the legal amount 10 micrograms per litre of a potential cancer causing compound, bromate. Shortly after illegal levels of bromate were found in Dasani, a spokesman for the Drinking Water Inspectorate released a statement noting that Thames water supply — the place Dasani was sourced from — contained no bromate whatsoever. It was eventually determined that during the final stage of the purification process used to produce Dasani, when ozone is used to sterilize the water, the small amount of naturally occurring bromide an essentially trace element for humans contained within the tap water reacted with the ozone to produce the suspected carcinogen, bromate.

The result was that Coke recalled over a half a million bottles of Dasani and the Food Standards Agency advised people who had already purchased Dasani not to drink it, though also noting the levels of bromate in Dasani, while well above the legal limit, did not pose any immediate health risk.

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Unlike Dasani, which is always sourced from public water supplies, Glaceau Smartwater is sourced from spring water, which means it must come from a single, non-polluted ground water source i.

I was thinking about this story a few days ago. On a rare trip into London and forgetting to top up my own bottle before leaving home, I bought a good sized but cheap 50 pence bottle of water from Primark.

The bottle promised much but tasted like tap water so looked who was bottling it. You guessed it, Coca Cola. Up to their old tricks me thinks? As you stated, is now a billion dollar US segment. This was not developed in-house. Just keeping things factual. It stinks, tastes odd and makes me sick. I drink Aquafina and only because our tap water is suspect. Thanks Pepsi! Regarding Glaceau.


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