Coca-Cola & Pepsi Harm India's Ecology|Business Ethics|Case Study|Case Studies

Coca-Cola & Pepsi Harm India's Ecology

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Case Details:

Case Code : BECG023
Case Length : 14 Pages
Period : 2001 - 2002
Pub. Date : 2002
Teaching Note :Not Available
Organization : Coke, Pepsi
Industry : Food and Beverage
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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A Novel Controversy! Contd...

Both the companies, however, refused to acknowledge responsibility for the damage done. Instead, they tried to pass the buck to their local partners (distributors, advertisers etc.). While Pepsi stated that it had little operational control over the affected Manali-Rohtang region, Coke argued that it was an 'extremely environment conscious' company and that the incident was a local mistake. As media coverage of this issue intensified, Coke and Pepsi began fearing the damage the controversy could cause to their image and popularity.

Damaging the Environment

The matter attracted the attention of the judiciary when a three judge bench headed by the Chief Justice of India B.N. Kripal pointed out the incident while hearing a public interest litigation regarding the conservation of forests in the country. The Supreme Court (SC) expressed concern over such acts by companies and said that they should be "made to pay" for the damage they did to the ecology in order to promote their business. Disturbed over the damage done to rocks in forests, Justice Kripal said that it would be proper to take up the matter in court. A person named Harish Salve was appointed amicus curiae (friend of the court) by the SC to investigate the matter and take the necessary legal action.

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Salve filed a case against the companies for commercial vandalism. The SC stated that the painting of the rocks was a non-forest activity and could not be carried out without the prior permission of the concerned authorities. Therefore, it asked the companies to explain why they painted the rocks.

After this, Salve, upon the court's direction, approached the National Environment Engineering Research Institute (NEERI5) to inspect the entire Rohtang-Manali road for advertisements painted on the rocks. Three days after the first news report was published, the court issued notices to the cola companies, charging them of violating the Forest Conservation Act 1980. A detailed report on the damage done by the companies (submitted by Salve) stated that "from the village Kothi to Rallah waterfalls to Beas Kund, a stretch of about 56 kilometers, advertisements have been plastered on the entire mountainside."6 Environmentalists pointed out that these mountainous facades were home to huge ecosystems that had developed over millions of years...

Excerpts >>

5] NEERI is an environmental research organization. It seeks to provide innovative and effective solutions to environmental problems. Headquartered in Nagpur, Maharashtra, NEERI also has branches in other cities like Ahmedabad, Kolkata, Chennai, Delhi, Hyderabad, Jaipur, Kanpur, Kochi and Mumbai.

6] 'SC Issues Notices to Coke and Pepsi for Ad Campaign on Rocks,', August 14, 2002.


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