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Indian Court Lifts Ban on Colas in Southern State

produced by the U.S. companies Coca-Cola and PepsiCo. The ruling is good news for the cola giants, which have been in the center of a storm recently over allegations that their products contain high pesticide levels.

The controversy erupted in August after a New Delhi environmental group claimed that the beverages sold by the two cola companies in India had traces of pesticides far above safety levels. The study triggered a countrywide uproar, and several Indian states banned the sale of the companies' products in schools, colleges, and hospitals.

The southern state of Kerala took the severest action, slapping a total ban on the manufacture and sale of soft drinks by Coca-Cola and Pepsi on the ground that they were unsafe.

But the state High Court has overturned the ban, calling it "harsh and arbitrary." It said the state government did not have the authority to ban the colas on the basis of a report by an environmental group. The ruling came after the two companies challenged the ban in court.

The judgment is being described as a victory for the drink companies, which have gone on an offensive in recent weeks to argue their products are safe and that they comply with international standards.

Consumer groups say the victory will help restore the companies' images, which took a beating after the environmental group's report.

The head of the Consumer Guidance Society of India, A.R. Shenoy, says the controversy was blown out of proportion in a country that faces more serious issues over food and water contamination.

"It was very much overblown, this was actually a non-issue," he said. "The issue itself is very flimsy, basically I do not think a normal consumer is affected."

The Kerala government says it will appeal the verdict, but the cola giants have welcomed the judgment. Coca-Cola officials say they hope the ruling will prompt other states to reconsider restrictions they imposed. Pepsi says the order validates the company's confidence in the quality of its products.

The judgment is the second piece of good news for the companies in the wake of the controversy. Last month, a government-appointed panel cast doubt on the findings of the environmental group, saying the sampling methods it used lacked a "scientific and statistically valid basis."

The environmental group hit back, saying the government is pandering to multinationals at the cost of public health.

Industry experts say the controversy had cut into the sales of Pepsi and Coca-Cola, which dominate India's soft drink market.