The CPI-M controlled Pudussery panchayat on Thursday, cancelled the licence issued to Pepsico India Holdings Pvt Limited's bottling plant at Kanjikode. When contacted, CPI-M district secretary Unni said the panchayat's decision also formed part of CPI-M's policy of boycotting MNC products in the wake of Iraq war, although the main reason was 'over-exploitation of water resources.' Company authorities said they were yet to receive any official communication.

However, Kerala Chief Minister A.K. Antony said the government would provide all possible legal protection to Pepsi . He said, "Pepsico came to Kerala during the LDF regime, and now they were opposing the company." Pepsico said that it started the unit after due survey by the department concerned on availability of water and denied the panchayat charge of over-exploitation.

Meanwhile, the Kerala High Court on Friday ordered that status quo be maintained with regard to the order of Perumatty panchayat president cancelling licence of Coca-Cola's bottling plant at Plachimedu, Palakkad District.