A section of Tamil Nadu traders' decision not to sell products of
Coca-Cola and PepsiCo starting March 1 is likely to cost Rs 1,400 crore in
annual sales to the two US beverages giants.
If the traders' ban includes food products such as chips, salty snacks and oats sold by PepsiCo, the loss would be significantly higher, industry sources said.
If the traders' ban includes food products such as chips, salty snacks and oats sold by PepsiCo, the loss would be significantly higher, industry sources said.
Major trade associations Tamil Nadu Vanigar Sangam and Tamil Nadu
Traders Federation earlier this week said they have instructed over 15 lakh
members, spanning across 6,000 smaller associations, not to sell PepsiCo and
Coca-Cola products starting March 1, accusing the firms of "exploiting the
state's water bodies to manufacture aerated drinks while farmers were facing
severe drought".
PepsiCo's
flagship brand Pepsi leads the TN market with over 60% share and both firms put
together have five plants in the state. Both firms spend heavily on local
promotions in the state and PepsiCo's celebrity brand ambassadors include Tamil
super star Dhanush, the face of its drink 7 Up. "It is extremely unfair on the part of certain individuals and organisations to propagate misinformation," Arvind Varma, secretary general of industry body Indian Beverage Association (IBA), said in a statement on behalf of Coca-Cola and PepsiCo.
"These actions are detrimental to the image of the country and to
the long-term interests of the Indian economy," he said.
Banning sales of any product is a government subject. The TN trade associations' decision to stop selling Coca-Cola and PepsiCo's products on their own comes at a time when makers of sugary drinks are witnessing single-digit growth and the government is considering a fat tax on sugary drinks and packaged snacks high on salt in the upcoming budget.
Banning sales of any product is a government subject. The TN trade associations' decision to stop selling Coca-Cola and PepsiCo's products on their own comes at a time when makers of sugary drinks are witnessing single-digit growth and the government is considering a fat tax on sugary drinks and packaged snacks high on salt in the upcoming budget.
An
inter-ministerial committee headed by the health secretary is already in place
to discuss matters such as increasing taxation and restricting marketing and
advertising of sugary drinks.
India's carbonated drinks industry, estimated at over Rs 14,000 crore, is dominated by Coca-Cola and PepsiCo. Coca-Cola's bottling operations in TN are run by Hindustan Coca-Cola Beverages along with an independent co-packer.
PepsiCo has three plants in the country's sixth most populous state.
India's carbonated drinks industry, estimated at over Rs 14,000 crore, is dominated by Coca-Cola and PepsiCo. Coca-Cola's bottling operations in TN are run by Hindustan Coca-Cola Beverages along with an independent co-packer.
PepsiCo has three plants in the country's sixth most populous state.
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