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Indian Court Completes Hearing in Cola Ban Case

Source: Reuters
12/09/2006

Kochi, Sept 12 - An Indian court on Tuesday concluded hearing a petition by Coca-Cola and PepsiCo challenging a regional ban on their products on grounds they were unsafe, but said a judgment would be given later.

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The Communist rulers of the southern state of Kerala banned the production and sale of drinks made locally by the two global giants last month after an environment group said their products contained dangerous levels of pesticides.

The two firms have petitioned the court to lift the ban.

The court, which took up the case on Monday, said it will announce the date of the verdict later.

Lawyers for the Indian units of Coca-Cola and PepsiCo told the court that the ban was unconstitutional. But counsels for Kerala have defended it saying the drinks were harmful and the government was within its rights to ban them.

Six other states imposed partial bans on Coca-Cola and Pepsi products by prohibiting sales at or near schools, colleges and hospitals.

The two firms have said their products were safe.

They have rejected the findings of the New Delhi-based Centre for Science and Environment (CSE) that said tests conducted by it on samples of the drinks across the country found high levels of pesticide traces.

Although annual sales of Coca-Cola and PepsiCo products in India, at nearly $1.29 billion, accounts for a tiny portion of their global business, the CSE report and the regional bans have hurt sales as well as their high profile images.

Last month, a government-appointed expert panel said CSE had failed to prove its claims and there were inconsistencies in its chemical analysis.

But the group has rejected the expert panel report saying the government was pandering to global business interests.



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