Pollution Board Shuts Down Coca-Cola's Varanasi Plant
Economic Times
June 19, 2014

NEW DELHI: One of Coca-Cola India's bottling plants in Uttar Pradesh has been ordered to close for various violations, including the extraction of groundwater, in a move that's reminiscent of the row a decade ago that led to the shutting of a unit in Kerala and resulted in the global beverage maker's image taking a beating.

The company-owned plant in Mehdiganj near Varanasi has been shut during peak season temperatures have been soaring across northern India by the Uttar Pradesh Pollution Control Board (UPPCB) as it found the company to be "violating a number of conditions" of its licence. The impact will be greater on the company's image than its business as the unit is one of Coca-Cola's smaller facilities, said two industry executives.

Coca-Cola's plant in Plachimada, Kerala, was shut in 2004 over allegations that the operation led to the depletion of groundwater. The company faces legislation holding it liable for $47 million in damages stemming from this.

The company hadn't obtained clearance for the extraction of groundwater from the Central Ground Water Authority (CGWA), a government agency that monitors and regulates the process in water-stressed areas, according to a June 6 order of the Uttar Pradesh pollution board.

Groundwater in Mehdiganj has gone from "safe" in 1999 when the beverage firm commenced operations to "critical" in 2009, according to CGWA.The maker of Coke, Thums Up and Sprite fizzy drinks and Kinley water, said the plant had complied with all "regulatory approvals and applicable laws".

The company hasn't been allowed or asked to present any facts or explain its position by the state body, it said in a statement.

Coca-Cola said it uses water very responsibly and judiciously, and according to it, a 2012 Central Ground Water Board report had observed that groundwater depletion in the area was not due to the Coca-Cola plant. The closure order said Coca-Cola increased its production capacity from 20,000 cases per day to 36,000 without the board's permission.

It also noted that Coca-Cola's waste treatment system was not operating "smoothly".

The beverage maker, which is in the midst of investing $5 billion by 2020, has filed an appeal against the order at the National Green Tribunal, seeking the reopening of the unit. The matter will come up before the tribunal next on Friday, it said in the statement.

Coca-Cola, which started bottling operations in Varanasi in 1999, has sought UPPCB's permission last year to expand production capacity at Mehdiganj by introducing a second bottling line.

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