Tuesday, March 16, 2004
By V. M. Thomas, Associated Press

COCHIN, India — American soft drink giant Coca-Cola suspended production at a south Indian plant on Monday, following a government order to stop using groundwater until monsoon rains start in June, a company official said.

Coca-Cola has issued notices to its employees and the state government saying that it would be "left with no option but to close down its factory at Plachimada," the official said on condition of anonymity.

Last month, the Kerala state government told Coca-Cola that villages in the area were facing acute drought and the soft drink company should not use groundwater until June 15.

Plachimada is 95 miles north of Cochin, southern Kerala state's main port city.

The Perumatty village council, which controls several villages, including Plachimada, says the Coca-Cola plant draws 400,000 gallons of water daily through dozens of wells, leaving local farmers with parched fields.

Last month, Vijay Bhaskar Reddy, a Coca-Cola communications manager, described the state government's decision as discriminatory and noted that a lawsuit is in the courts.

A top court in Kerala in December ordered the Coca-Cola plant to stop using groundwater and arrange to get water through other sources. The company has challenged that order, and the case is pending.

Source: Associated Press