New Delhi: This year (2003) has been devastating for American soft drink giants Coca-Cola and Pepsi in India, with the pesticide controversy taking an unprecedented toll not only on their public image but also on sales, a mid-year price cut notwithstanding.

When the Centre for Science and Environment (CSE) alleged that 12 brands of Coke and Pepsi contain pesticide levels many times higher than permissible limits, the two companies were dumbfounded, not having had the experience of dealing with such allegations in any of the countries they operate in globally.

And even five months after the CSE assertion, officials of both companies admit the damage done by these accusations have been far-reaching. Sales have been hit substantially and refuse to show an up trend despite large-scale damage control including advertisements proclaiming the companies' innocence.

As if the company did not have trouble enough, former Miss India Sushmita Sen's reported allegations of sexual harassment against a senior Coca-Cola India official at the fag end of the year appear to have nailed the coffin of the company's woes in India. It, however, reached a settlement with Sen and denied it had anything to do with such allegations.

Coke, after failing to gain a reprieve despite hectic lobbying with the Government, also had to divest 49 per cent stake in Indian operations in the beginning of the year in favour of resident Indians so that the Atlanta-based parent company's hold over Indian operations weakened.