Water Scarcity Challenges Beverage Giants in Rajasthan

In Rajasthan, India, foreign beverage companies such as Diageo, Carlsberg, and Heineken face significant challenges due to dwindling water supplies amid strict government regulations. The state, which is largely covered by the Thar Desert, has a groundwater extraction rate that exceeds the natural recharge capacity of its aquifers. This situation is exacerbated by the fact that nearly two-thirds of Rajasthan's 85 million residents experience limited access to water, often receiving it only once a week.

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The Indian government has classified areas like Alwar, where many beverage companies operate, as "over-exploited" for groundwater. Consequently, industries are mandated to adopt advanced water-efficient technologies to reduce their reliance on groundwater. Diageo's Alwar head, Sumit Walia, stated that the company aims to reduce water consumption by 40% and achieve 100% replenishment of groundwater extracted. The federal government permits beverage companies to draw approximately 4.6 million liters of groundwater daily, with Heineken leading at 1.2 million liters.

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Local residents express frustration over water scarcity, with some blaming beverage companies for exacerbating the issue. Imran Khan, a village head in Salpur, highlighted the difficulties faced by locals in accessing water, noting the need for advance notice to pump water from borewells. Haider Ali, another resident, has taken legal action against beverage companies, alleging unauthorized water extraction. However, a court inspection found that the companies complied with regulations, and the court has since directed authorities to monitor groundwater extraction closely.

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The water crisis in Rajasthan is not isolated; it reflects a national trend where industries, including those in sectors like paper and automobiles, consume significant water resources. Coca-Cola's water security plan indicates that the company operates in regions of high water stress and anticipates rising costs associated with water procurement. Diageo and Carlsberg argue that their water usage is a small part of the broader issue, with initiatives aimed at community support and environmental sustainability.

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Beverage companies assert their commitment to improving local water conditions. Diageo has engaged in various community projects, including building small dams and funding boreholes. Carlsberg's sustainability vice president, Simon Boas Hoffmeyer, emphasized that their water replenishment goals exceed regulatory requirements. Subhransu Kumar Bebarta from the S M Sehgal Foundation noted that while these companies have positively impacted groundwater levels, there remains a need for larger infrastructure projects to address ongoing water scarcity.

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Despite the companies' claims of compliance and community engagement, local grievances persist, indicating a disconnect between corporate initiatives and community needs. The court's directive for stricter monitoring of groundwater extraction highlights ongoing concerns about the sustainability of water resources in Rajasthan.

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• “(Water stress) is a growing issue in India,” — Sonia Thimmiah, Senior Director of Global Sustainability, Heineken

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• “We have a vision to reduce water consumption by 40% and to ensure that whatever water is withdrawn from the ground, 100% replenishment is there.” — Sumit Walia, Head of Diageo Alwar

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• “They are making alcohol there but locals do not have enough water to drink” — Haider Ali, Alwar Resident

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• “If everybody did that, the industry’s share of the issue would be very, very small,” — Simon Boas Hoffmeyer, Vice President for Sustainability, Carlsberg

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The challenges faced by beverage companies in Rajasthan underscore the complex interplay between industrial growth and water resource management in one of India's most water-stressed regions.

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