Coke suspends bottling at plant at center of water dispute

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Coca-Cola suspended bottling at three plants in India, including one in the parched northwest where farmers have been protesting the company's use of dwindling groundwater reserves.

Hindustan Coca-Cola Beverages, which is a subsidiary of The Coca-Cola Co. based in Atlanta, said it was reorganizing operations across its 24 franchise bottling plants in India according to market demand and factory upgrades.

The company's action, however, follows more than a decade of agitation by farmers in the state of Rajasthan, where groundwater levels have been plummeting.

Coca-Cola said in a statement that it runs the Kaladera plant in Rajasthan "as a responsible corporate citizen," and is collecting rainwater and helping farmers to irrigate their crops. The plant is still being used for storage and other operations.

The two other plants are in the northeastern state of Meghalaya and the southern state of Andhra Pradesh, company spokesman Kalyan Ranjan said Friday.

"Water wasn't an issue in these two plants," Ranjan said, though Andhra Pradesh is another Indian state facing a crisis in its water supply. "We are rationalizing capacity and economic viability, and these are very old plants." Meanwhile, the company says it is building new facilities in India.

Both Coca-Cola and competitor PepsiCo Inc., which is headquartered in Purchase, New York, have faced ongoing protests against several of their plants across India over access to dwindling groundwater reserves.

India is depleting its aquifers more quickly than any other country or region in the world. By 2030, studies predict the South Asian nation of 1.25 billion and counting will have just half the water it needs.

Yet there is still no clear, nationwide plan for how India will cope with competing and growing demand from agriculture, industry and urban areas. Hundreds of millions of farmers nationwide are still pumping ground reserves with little to no oversight.

Agriculture accounts for 91 percent of the country's groundwater use, while cities swallow up about 7 percent and industry takes 2 percent.

Amid local agitation in 2005, Coca-Cola closed a plant in the southern state of Kerala.

PepsiCo had also faced a backlash against its plants, leading to it pledging a "positive water balance" and announcing it had replenished billions of liters in 2009. The company says it has helped thousands of subsistence farmers by offering guaranteed purchase of their crops. But last year, it faced violent protests against its plans for a new plant in the southern state of Tamil Nadu.


Associated Press writer Ashok Sharma contributed to this report.


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