PepsiCo is considering the closure of its factory in the Palakkad district of the state of Kerala, according to local sources.

Local residents have alleged that the facility is causing similar problems to a Coca-Cola plant in the region, which was closed in 2004 after it was accused of drawing excess water from the wells on its premises.

The State Government of Kerala has started an investigation into the allegation.

A senior manager of the company, who did not wish to be named, said: “Currently, we are waiting for the Kerala government’s report. If the situation arises, we will close our factory in the state like Coca-Cola.”

PepsiCo officials declined to comment on the matter late last week.