Summary of the Case

On august 20, 2003 Sanjiv Gupta only six week in his new role as CEO of Coke India found himself in a contemplating event of sale drop 30-40% in two weeks. This crisis for the company took place just after the momentum gained from a highly successful two-year marketing campaign that had given Coca-Cola market leadership over Pepsi.

This scenario takes back to august 5th when The Center for Science and Environment (CSE), an activist group in India focused on environmental sustainability issues press release stating: "12 major cold drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues"
According to PML (Pollution Monitoring Laboratory) of CSE from three sample of Pepsi and Coke found to contain pesticide residues surpassing global standards by 30-36 times including Toxic chemicals from which human body could suffer from cancer, damage to the nervous and reproductive systems, birth defects, and severe disruption of the immune system.

In reaction the Govt. banned Coke and Pepsi products and took series of actions against them. As a result Coca-Cola Bottling Company lost its sock prices in New York in the six sessions following the August 5 disclosure, as did shares of Coca-Cola Enterprises (CCA).

As a response to the problem immediately both Coke and Pepsi called the CSE allegations “baseless” and questioned the method of testing but the CSE claimed it had followed standard procedures documented by the US Environmental Protection Agency including
Gas Chromatography and Mass Spectrometry. Then both Pepsi took their own private testing into account and took it to a legal action based situation.

Despite these early responses from Pepsi and Coke with the threat of legal action the situation didn’t seem to turn out in their favoring the contrary it got worse and the consumer and the Govt. both