Why Pepsi, Coca-Cola hold in Tamil Nadu cannot be overturned by local brands

 

Previously at the time of the Jallikattu protests, the Tamil Nadu Vanigar Sangam had called for traders to ban Coca-Cola and Pepsi products from March 1, to boost sales of local brands but looks like the ban fizzled out before it could do much damage. How the ban will negatively affect Tamil Nadu is what is making news now.

 

Did you know?  A similar attempt was made in 1998, but then customer demand forced them to drop the idea and now they thought that the Jallikattu uprising would turn the tides in their favour. At the time of the Jallikattu protests, tempers were flared, passions was on a high, the bull pride was coursing through the veins of every common man in Tamil Nadu. Anyone who dared oppose Jallikattu was sent a severe warning. Anything foreign like PETA became their target.

 

The striking trader sangam cited how colas and carbonated fizzy drinks were damaging to the health of the public, how water resources were drying up in the state etc. This ban would provide a boost to the local brands. However, industry sources say that while the market is estimated to be around Rs 2,000 crore, the share of local brands is only about Rs 600 crore. So would this boycott actually damage?

 

The Traders Federation in Tamil Nadu President, A M Vikrama Raja said: "About 70 per cent of the (15 lakh) traders have decided to boycott the sales of Coke and Pepsi from today onwards for their toxic nature. Whatever you find on the shelves of the stores are leftover stocks which were not taken back by the (distributing) agencies," he had said. The soft  drink giant Coca-Cola was expected to lose around Rs 1,400-1,500 crore of business every year, if the ban came into effect.

 

 

According to a report in the Business Standard, the initiative received a mixed response from retailers. They have their reasons also because the Cola company giants make sure their executives are available for help whenever called as opposed to the local brands. Some traders being regular customers can avail of payment in instalments as well, whereas, with the local brands the payment is upfront. Also adding to the incentive is that Pepsi and Coca Cola in Tamil Nadu provide their customers with a fridge and if they stop selling these products traders fear that even this perk will go.

 

Also, a PIL seeking ban on water to the giants was filed by Tirunelveli district consumer protection association secretary and former MLA, DA Prabhakar, in addition to another similar one.

 

The petitioner said as the two companies gobbled up huge quantities of water, estimated at 30 lakh litres per day, they should be barred from exploiting the natural resource as it was adversely affecting the farming community. He also cited a Supreme Court ruling to argue that water should not be used for commercial purposes. The judges had, during a previous hearing, questioned why the petitioners left out other soft drink manufacturers of the region and instead filed a case against the two companies.

 

 

Food Processing Minister Harsimrat Kaur Badal, on Thursday, said that a sales ban on Coca Cola and Pepsi in Tamil Nadu is against the democratic values of the country and would only foster black marketing.

 

Badal rued that "politics" was being played on the issue. She further said: "Someone who wants to drink Cola will find Cola despite all odds. This (the ban) will increase black marketing and corruption."

 

The Indian Beverage Association has also released a statement regarding the boycott, they have called it anti-consumer, anti-retailer, anti-competition and against the Make in India directive. The Indian Beverage Association has already clarified that both Hindustan CocaCola and PepsiCo India are local companies, registered in India and compliant to all applicable rules and regulations. They respect local culture and consumer sentiments.

 

The Association, has also stated that Coca-Cola and PepsiCo India play a critical role in improving the livelihood of over 2 lakh retailers, who earn more than Rs 400 crores in income by selling products manufactured by the two companies. The companies also sustain the interests of thousands of Tamil Nadu farmers, by procuring agri-produce. Furthermore, Coca-Cola and PepsiCo India together provide direct employment to 2,000 families in Tamil Nadu and more than 15,000 families indirectly, through their extensive supply chain.

 

While we do not recommend the beverage for the effects it poses to our health, this ban is simply not the way out. The traders could think of alternatives like improving the Rs 600 crore local soft drink industry instead, and also banning of the cola giants would send lakhs of TN workers unemployed and another problem would be at hand.

 

 

with inputs from PTI