With the onset of summer in India, PepsiCo and Coke may be in for some trouble in the southern Indian state of Tamil Nadu, even as they battle falling sales across the country.
Prominent trade bodies in Tamil Nadu have asked retailers not to stock brands of multinational beverage makers beginning March 01. They have cited the exploitation of local water bodies by them, which has led to droughts in the state, and alleged ill-effects of fizzy beverages on health, as reasons for the boycott. Instead, they have asked retailers to stock up on local brands such as Kalimark’s Bovonto, Amrutanjan’s Frutnik, and Parle Agro’s Frooti.
The Tamil Nadu Traders Federation (TNTF) and the Consortium of Tamil Nadu Traders Association (CTNTA) are the two organisations at the forefront of this boycott call, the DNA newspaper reported.
However, it is unclear how many of the state’s 20 lakh (2 million) retailers will join the call. Some supermarket chains have said they will continue to stock Coca-Cola and Pepsi brands if demand persists, media reports say. Foreign companies such as PepsiCo and the Coca-Cola Company, together, account for nearly 90% of the Rs1,400-crore beverage market in the state. Such diktats, if followed by the retailers, could severely affect the two cola majors which have five bottling plants in the state.
The boycott call comes at a time when Indra Nooyi, PepsiCo’s global chief, who incidentally hails from Tamil Nadu, is on a week-long tour to India to discuss investment proposals. Nooyi is scheduled to meet prime minister Narendra Modi later in the week.
Expressing disappointment with the move, Indian Beverage Association, an industry body that represents large beverage makers including both Coca Cola and PepsiCo, said that the boycott is against the proven fundamentals of robust economic growth, and violates the rights of the consumer to exercise choice.