Pepsi executives agree to a settlement with a California environmental group that limits the amount of a chemical in the caramel coloring of its beverages.

Scientific studies suggest the dye causes cancer, and the Center for Environmental Health (CEH) brought suit under California’s Proposition 65.

“This is a cancer-causing chemical in a product that, according to surveys, half of Americans consume,” said Charles Margulis, media director for CEH, in an interview with Healthline.

Soda consumption has declined in recent years, but Americans still average one sugar-sweetened beverage per person per day, although some of those are teas and sweetened juice blends.

Pepsi said in an e-mail that it believes the company’s products comply with existing laws and are safe for consumption.

“In addition, we have now voluntarily implemented a few additional standards to give consumers further confidence in the quality of our products,” Aurora Gonzalez, a Pepsi spokesperson, wrote.

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CEH sued Pepsi in February 2012, saying the company’s use of 4-MEI was in violation of California’s Proposition 65.

The law, approved by state voters in 1986, regulates drinking water and toxic chemicals to which citizens may be exposed. It requires businesses in California to notify consumers about toxic chemicals in products.

Since its enactment, the law has resulted in the addition of 800 chemicals to a list of substances known to “cause cancer or birth defects or other reproductive harm” published by the state.

The chemical 4-MEI, used to make certain pharmaceuticals and dyes, was added in January 2012 based on the findings of a 2007 federal study that showed long-term exposure to 4-MEI resulted in increases in lung cancer in mice.

In this case, CEH told Pepsi in 2012 that unless it reduced the levels of 4-MEI in its sodas, it would have to label the products as potentially cancer-causing.

According to the legal settlement, Pepsi “devoted significant resources” to reduce the levels of 4-MEI in its sodas. But CEH wasn’t satisfied that Pepsi beverages were safe enough to steer clear of Proposition 65 labeling laws. In January 2014, CEH filed the legal action.

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The agreement requires Pepsi to pay $385,000 as a settlement payment. CEH will receive $160,000, a majority of which will be used for public education programs about toxic chemicals. Another $165,000 goes to legal fees and the remaining $60,000 will go to the state’s Office of Environmental Health Hazard Assessment.

In addition, Pepsi agrees to manufacture its products, starting with those shipped on November 1, in such a way that it lowers the amount of 4-MEI to levels stipulated in the agreement. Pepsi makes no admission of violating any product safety laws.

CEH may also request testing of Pepsi beverages in the future to make sure they meet the standards. If products are found not to meet the standards, Pepsi will be required to pay a $250,000 fine for every 90 days of noncompliance.

Gonzalez said that although this case is technically limited to California, Pepsi’s products are uniformly manufactured, so the agreement will apply to all its beverages nationwide.

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