TN shops boycott Pepsi, Coke products to encourage local soft drink brands
Thousands of shops across Tamil Nadu began a boycott of Pepsi and Coke from Wednesday morning in a move to boost local manufacturers. The move may cost the soft-drink majors Rs 1,400 crore in losses.india Updated: Mar 01, 2017 17:58 IST
Thousands of commercial outlets across Tamil Nadu launched a boycott of PepsiCo and Coca Cola products on Wednesday morning in a move to encourage local cola manufacturers.
The decision may cause the two soft drink giants to incur as much as Rs 1,400 crore in losses.
The Tamil Nadu Vanigar Sangangalin Peramaippu (TNVSP), the state’s largest trade body comprising 6,000 business enterprises and 1.5 million members, told HT that the boycott would be implemented at all retail outlets affiliated to it. Though the bigger supermarkets and restaurants – about 5,000 in number – sought more time, TNVSP representatives said they have scheduled a meeting to discuss the issue later in the evening.
“Their initial response is encouraging. They only want some time to work out the boycott plan. I am hopeful that they will also commit to a date by evening,” said AM Vikrama Raja, president of the traders’ body. “I am happy that shopkeepers are resisting very tempting offers – three to five crates free for every ten crates of foreign colas bought – from marketing agents of the soft drink giants. Almost 70% of our members have not ordered fresh stocks.”
Many shops already display ‘No Pepsi, No Coke’ posters prominently.
The boycott decision was first mooted during the massive protests that rocked the state last month, forcing politicians to legalise the popular bull-taming sport of Jallikattu. However, several shop owners in various parts of Chennai are yet to extend their support to the boycott.
Srinivasan R, a shopkeeper in Mylapore, said he reserves the right to stock what he wants in his outlet.
S Kumaran – who runs a popular grocery store at Adyar in South Chennai – had his doubts about the boycott, but eventually decided to go with the flow. “I think it is for the customer to decide (which product to buy), but I will not order any fresh Pepsi and Coke stocks,” he said.
The boycott call received a mixed response in other cities too, though TNVSP secretary K Mohan insisted that “at least 75% of shopkeepers across the state have stopped selling Coke and Pepsi – and the others are expected to follow suit”.
Explaining the rationale behind the boycott, Mohan told Hindustan Times: “The decision was taken to wean the youth away from MNC soft drinks, which are killing domestic companies. Besides this, these foreign firms are also using up scarce water resources at a time of unprecedented drought.”
Indian soft drink brands are both cheaper and healthier, he said, adding that the boycott may even encourage the youth to have “nutritious” fruit and vegetable juices.
The trader’s body has alleged that the soft drink majors were “arm-twisting” small traders into staying out of the statewide boycott. “Many shopkeepers do not even earn enough to pay for the electricity used to keep the drinks chilled,” Mohan said.
Mohan said the energetic response of the youth to the Jallikattu ban had emboldened the trade body to take on the soft drink majors. “We are yet to gauge the effectiveness of the boycott. It’s not a call for a ban; it is more like an appeal,” he added.
The TNVSP claimed PepsiCo and Coca Cola were “killing” over a hundred local cola brands – such as Bovonto, Trio, Solo, Frutang, Torino, Dailee and Mapillai – which constitute a mere 20% of the Rs 2,000-crore soft drink market.
The Indian Beverage Association (IBA), which represents the cola majors, said in a press statement that it was “deeply disappointed” by the boycott call. “This call is against the proven fundamentals of robust economic growth, and against the clarion call of ‘Make in India’,” it read, adding that the decision also violates the consumer’s “right to choose”.
The IBA press release said Hindustan Coca Cola and PepsiCo India are local companies registered in the country, and comply with all applicable rules and regulations. It went on to add that the two firms provide direct employment to 2,000 families across Tamil Nadu, and indirect employment to over 5,000 families through their extensive supply chain. “They also play a critical role in improving the livelihood of over two lakh retailers, who earn more than Rs 400 crore by selling products manufactured by Coca Cola and PepsiCo,” it said.
Incidentally, the boycott movement originated in Chennai – the same city that PepsiCo chief operating officer Indira Nooyi hails from.