The Sucrose Sucker Punch

What the health ministry notification did was allow the use of synthetic sugar substitutes like aspartame and acesulfame under the Prevention of Food Adulteration Act. Aspartame and acesulfame are the critical chemicals in low-calorie soft drinks. Pepsi, which had waited for years for this permission and was in full readiness to launch Diet Pepsi, was all over television within hours of getting the clearance; the TV ads promised just one calorie in its 330-ml can.

But even before PepsiCo could reach wagonloads of the white-coloured cans around India from its plant in Roha, Maharashtra, the health ministry issued a press release. Yes, the two artificial sweeteners were permitted, it said, but 'it does not remove the mandatory requirement of 5 per cent sucrose content in these products. Hence, all carbonated water containing artificial sweeteners will have the minimum stipulated sugar content also.' The point, of course, is that 5 per cent sucrose means 120 calories. There can't be a diet drink with sucrose in it. And Diet Pepsi too then definitely can't have only one calorie, which is its key appeal to consumers.

In the meantime, on June 7, Pepsi's archrival Coca-Cola released full-page ads in leading dailies, announcing the imminent launch of Diet Coke, claiming less than even one calorie.

The two cola giants have reacted to the government's 5-per-cent-sucrose stand in diametrically opposite ways. Pepsi is defiant. It says it has no intention of withdrawing Diet Pepsi from the shops and is on strong legal ground. The company has pulled out a '75 Supreme Court judgement made by a bench led by then Chief Justice P.N. Bhagwati which, Pepsi claims, differentiated between 'sweetened carbonated drinks' and 'carbonated drinks' and said that 'carbonated drinks' need not include 5 per cent sucrose. Diet Pepsi, claims the company, is a 'carbonated drink', not a 'sweetened carbonated drink', and a government press release cannot overturn a judgement by the apex court.

'This is the most absurd thing I've come across. We are conforming to the government notification which can't be superceded by a press statement. We'll not make any changes in the content,' says S.V. Padmanabhan, PepsiCo India vice-president (corporate affairs). Adds Deepak Jolly, PepsiCo's vice-president (corporate communications): 'There is no question of adding sucrose. The ad campaign talking of one calorie will continue to run across the channels.'

Coca-Cola, however, is more circumspect. It has quietly withdrawn the ads it released announcing the coming of Diet Coke. 'It's better to be cautious,' says Rahul Dhawan, Coca-Cola India's director (external affairs). Company insiders claim that the ads were withdrawn because the company felt that since the ministry was unclear about the ingredients of such a drink and would take some time to decide on the sucrose issue, it was better to wait and watch.

In the meantime, sources close to Pepsi allege that Coke is behind all this confusion. They claim that since Coke wasn't ready with its diet product, it lobbied with the government after the notification was issued to include the sucrose condition so that Pepsi would have to withdraw its product and would lose first-mover advantage. Coke flatly denies this. 'As long as the law is ambiguous, being first in the market does not mean anything,' says Dhawan.

The health ministry is not helping matters by giving mixed signals on the issue. Says S.R. Gupta, additional director general, department of health services: 'The 5 per cent sucrose content is mandatory and we propose to write to Pepsi soon.' 'This is Pepsi's way of interpreting things in India. But we are not the law enforcement agency to punish Pepsi. It is up to the state level officials to look into the issue and take appropriate action,' adds Deepak Gupta, joint secretary, health ministry.

But Pepsi claims it has not received any letter from the government on this. And Sobha Koshi, director, department of health services, told Outlook that the ministry is now contemplating dropping the 5 per cent sucrose requirement. But even that process would take a couple of months. Till then, the impasse would continue. So, it appears, would the defiant sale of Diet Pepsi.