Indian states ban Coke and Pepsi

A quarter of India's 28 states have announced partial or total bans on Coca-Cola and PepsiCo in the wake of fresh concerns over pesticide levels in soft drinks.

More bans are expected in the coming days in a political backlash against the US companies that has the potential to disrupt flows of US and other foreign investment to India.

The US has urged Manmohan Singh, India's prime minister, to take the lead in resolving the crisis, according to one person close to the situation.

"There's been government contact and there's going to be more government contact because the potential impact this could have on the investment climate is very serious," he said. "These are world-class and symbolic US companies getting kicked."

Andhra Pradesh and Karnataka, two southern states, yesterdayjoined Rajasthan, Gujarat, Madhya Pradesh and Chattisgarh in banning the sale of Coca-Cola and Pepsi products in and around publicly-funded schools and government offices.

Kerala, a southern stronghold of the communist party of India (Marxist), on Wednesday became the first state to impose a total ban on the making and selling of the cola products.

"We have decided to ban the production and distribution of Coca-Cola and Pepsi with immediate effect," said V.S. Achuthanandan, Kerala's new communist chief minister.

The states acted after the Delhi-based Centre for Science and the Environment last week released a report showing Indian colas contain on average 24 times permitted pesticide levels.

But the two companies say they are victims of a campaign by opposition and left wing parties to embarrass a congress party government for cultivating close ties with the US.

Industry analysts said most Coke and Pepsi products are consumed in India's biggest cities - Delhi, Mumbai, Kolkata and Chennai - which have yet to be directly affected by the bans.

Coca-Cola and PepsiCo have run advertisements saying their drinks are safe, but have otherwise refused to comment.