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PepsiCo, Coke India secure minor victory as Tamil protests rage on

By India , 06-Mar-2017

© iStock
© iStock

The world’s biggest softs drinks companies were given some respite this week from a furious protest against their products in Tamil Nadu when the state high court overturned a ban on one of their their local water sources.

It will be seen as a small yet significant victory for PepsiCo India and its Coca-Cola counterpart after their co-packers were banned from using river water supplied in Tirunelveli District last year.

The development is the latest in a decades-long feud between residents in the southern Indian state and the multinational beverage manufacturers concerning the water supply, whose levels drought-hit villagers and farmers say have been affected by manufacturing.

The stand-off has turned even more bitter in recent years. A major protest in 2015, for example, against the allotment of land and water from the Thamirabharani river for a Pepsi factory, developed into a clash between farmers and the police, leaving many of the protesters wounded.

The stay on using the water was vacated after the judges demanded to know why the earlier petition had only been filed against Coca-Cola and PepsiCo, and not other regional soft drink makers.

Since it was overturned, the banks of the Thamirabharani have witnessed further protests by farmers and students against the multinationals.

Meanwhile, local anger over the river water was exacerbated even further when the American animal rights pressure group Peta began an international protest against jallikattu, a traditional Tamil sport similar to bullfighting.

Outraged by what they saw as unwanted meddling from another country, civic groups and unions seized the opportunity to turn on Coca-Cola and PepsiCo, their old adversaries, this time with public support. 

It was announced in January, soon after the jallikattu outrage began, that restaurants, stores and vendors would stop selling the multinationals’ products from March 1. 

The action has been organised supposedly in protest against the unhealthy nature of Coke and Pepsi, though locally owned sweetened-drink brands are not covered by the “ban”.

AM Vikrama Raja, president of the Tamil Nadu Traders Federation, said that nearly three-quarters of the 1.5m traders it represents had decided to boycott the American companies “for their toxic nature”.

Whatever you find on the shelves of the stores are leftover stocks which were not taken back by [distributors],” he said. 

Analysts believe that Coca-Cola India alone would lose up to Rs15bn (US$225m) in business in Tamil Nadu if the ban was in place for a year.

Responding to the action, the Indian Beverage Association said it was “deeply disappointed”, and suggested such a move was un-Indian—a sentiment echoed by food processing minister Harsimrat Kaur Badal, who said last week that the sales ban was against India’s democratic values.

As local companies registered in India and compliant with Indian law, Coca-Cola and PepsiCo together employ 2,000 Tamil Nadu families directly, and a further 5,000 indirectly through the supply chain, the IBA said in a statement.

This call is against the proven fundamentals of robust economic growth, and against the clarion call of ‘Making in India’. The boycott call also violates the rights of the consumer to exercise choice,” it added.

The association hoped “good sense would prevail” and that it was open to “engage” with any of the organisations behind the protest.

Meanwhile, with apparently no end in sight to the protest, the drinks majors will comfort themselves with the court’s decision over their water supply, and memories a similar attempt against them in 1998, that ended in failure for the protesters.

Back then, consumer demand for the products forced the unions and associations to drop the idea, though this time such a conclusion could be seen more as a hope than a certainty as the protest moves into its second week.

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