Court restores water supply to Pepsi, Coca-Cola in Tamil Nadu, but retailers ban it | business-news | Hindustan Times
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Court restores water supply to Pepsi, Coca-Cola in Tamil Nadu, but retailers ban it

business Updated: Mar 02, 2017 14:29 IST
Sunny Sen
Pepsi

A Pepsi truck that delivers products to vendors (AP)

The Madras High Court quashed the petition filed to ban water supply to multinational cola makers Pepsi Co and Coca-Cola in Tamil Nadu, while the retailers of the state stopped selling their beverages.

While the move is seen as a nationalistic measure to ban foreign companies to support Indian beverage makers, the Court restored water supply for continued production, of what trade associations called unhealthy beverages, which was responsible for the depleting water level in the state’s rivers.

The petition was filed Tirunelveli District Consumer Protection Association secretary DA Prabhkar, argued that the beverage makers were drawing water at subsidised rates, and leaving farmlands parched.

Separately, the ban, which was triggered during the Jallikatu protests as youths in large number supported the bull-taming game, might take a “swadeshi” turn if it is backed by the young population of Tamil Nadu, who are the largest consumers of cola.

The ban was called by two of the largest trade associations of Tamil Nadu -- the Federation of Tamil Nadu Traders Associations (FTNTA) and the Tamil Nadu Traders Associations Forum (TNTAF).

A FTNTA spokesperson said foreign-made drinks are not good for health and added that the associations will promote Indian soft drinks and juices, and their manufacturing. They would also urge more retailers to push sales of Indian drinks over foreign drinks.

Meanwhile, the petition said that large beverage makers drew three million litres every day, which is not helping the farmers. To put things in context, the gross domestic product (GDP) of Tamil Nadu is $250 billion, the second largest in the country, which has 21% of its contribution from agriculture.

The cola companies did not make any comment on the situation.

However, the Indian Beverages Association, in a statement, defending Coca-Cola and Pepsi, “Coca-Cola and PepsiCo India together provide direct employment to 2,000 families in Tamil Nadu and more than 5,000 families indirectly, through their extensive supply chain. They also 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 farmers, by procuring agri-produce.”

Experts said that the ban can have a mixed impact. “The logic is flawed because even Indian drinks would need water... It also becomes the battle between the small drinks-maker (Indian companies) and larger multi-nationals. However, any such movement should be started by consumers, and not by the traders,” said brand consultant Harish Bijoor.

Patanjali, by a multi-product company set up by yoga guru-turned-entrepreneur Ramdev has been towing the line of swadeshi for over three year. It talks of desi versus videshi, non-chemical and ayurvedic products, and even burning foreign products.

“There is a greater degree of jingoism in Patanjali, but this movement in Tamil Nadu can very well become a larger nationalistic movement,” said Bijoor.

Prime Minister Narendra Modi’s Make in India and Startup India have their own effect on swadeshi -- one talks of manufacturing in India and the other talks of building more companies out of India. During his election campaign, he talked about creating more jobs, and stopping brain drain.

Modi’s party BJP has its affiliate, the Swadeshi Jagran Manch, that supports India being built by Indians. In the past, the manch had even criticised Modi’s foreign direct investment (FDI) policy.

India is a young country with over half of its population under 25 years of age. To get the youth adopting Indian products would mean opening up a large consumer base, which is largely tilled towards foreign products.

The associations said that helping Indian brands grow will eventually help farmers, with better and larger procurement.