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EDINBURGH, January 21, 2008: A leading environmental research group has asked Coca-Cola to consider shutting down a bottling plant in Rajasthan, saying it is depleting water supplies in the desert state.    The recommendation came in a report released last week by the Energy and Resources Institute which was commissioned by Coca-Cola in 2006 in response to reports that pesticide residues had been found in its products. The study found no pesticides in the water used at the six bottling plants it sampled, and said that water quality “generally meets the government regulatory standards”.

But the report expressed concern about the company’s use of scarce water supplies—an issue that has been raised repeatedly by villagers who live near several of the company’s bottling sites. The assessment looked at six of the company’s 49 bottling plants in India, but highlighted conditions at the Kaladera plant in Rajasthan. The plant’s presence in this area would “continue to be one of the contributors to a worsening water situation and a source of stress to the communities around,” it said. The company should find alternative water supplies, relocate or shut down the plant, the report concluded.    Atul Singh, chief executive of Coke's India division, said the company was not  considering shutting the plant. "The easiest thing would be to shut down, but the solution is not to run away," he said. "If we shut down, Rajasthan is still going to have a water problem. We want to work with farming  communities and industries to reduce the amount of water used," Singh was quoted, as saying.

Coca-Cola commissioned the study after a wave of student protests on campuses

Coca-Cola commissioned the study after a wave of student protests on campuses around the world, spurred by reports of high pesticide levels in Coca-Cola drinks in India. Those accusations originated with another Delhi-based environmental research group, the Centre for Science and Environment, which disclosed in August 2006 that tests it had conducted on 11 Coke and Pepsi products showed pesticide levels as much as 24 times the recommended limit. Shortly after those findings were released, students at the University of Michigan called for a ban on the sale of all Coke  products on campus. After talks with the university, Coca-Cola agreed to cooperate with an independent assessment of its work in India. The university selected the institute to conduct the research, which was financed by Coke. In a letter to Coca-Cola after publication of the report, the University of Michigan said it would continue to do business with the company.   Sunita Narain, head of the Centre for Science and Environment, said that TERI tested the water used in the manufacture of the drinks, rather than the final product. “We don’t see this as a clean chit for Coca-Cola because the study doesn’t test the final product, and that is what the consumer drinks,” she said in a telephone interview, adding that pesticides could be present in other ingredients.       Rising demand for commercial water coincides with plummeting ground-water levels, which dropped by up to eight meters (26 feet) in the first seven years of Coca-Cola's operations in India, from 1999 to 2006, according to India Resource Center, an activist group, citing data from hydrograph monitors of the government's Central Ground Water Board.    Ironically, the 500-page TERI report that urged closure of the Rajasthan bottling plant was  commissioned by Coca-Cola in 2006 to study allegations of pesticide residues in its products. TERI found no pesticides in water samples in six bottling plants it studied, but its findings on water stress vindicated water protesters and  stunned Coca-Cola executives, who have not contradicted the findings. Of the six Coca-Cola plants surveyed in the study, three are in areas suffering increased stress on groundwater.      Coca-Cola gets 70% of its net operating revenue from outside the US, with growth led by Eurasia, in which the company groups India with the rest of the landmass east of the European Union to the Pacific, excluding China and Southeast Asia. Eurasia's 16% growth last year in unit case volume of the company's products, including water, was the fastest pace of Coca-Cola's six geographical groupings, according to its web site. Net operating revenues in Eurasia grew 24% in 2007, a pace matched only by Latin America, and operating income growth of 38% was more than double the company's overall worldwide increase.

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