South Asia radius

Drinks companies unite to counter India’s looming health policies

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: Coca-cola, India

Executives from some of India’s biggest food and beverage companies have begun discussing ways to join forces and lobby the government to abandon plans to squeeze the industry.

According to a wire report, senior industry figures gathered last month to look at how they can work together at a time when Delhi is planning a GST “sin tax​” on carbonated drinks, as well as measures to crack down on junk foods.

Fearing higher taxes and stricter labelling, officials from PepsiCo, Nestlé and ITC, among others, fell they must now look closely at their options. 

Lately, government departments have turned their attention towards policy ideas first mooted two years ago as they wrestle with soaring rates for lifestyle diseases in the fast-emerging country. 

Policy-shapers have reportedly been working increasingly feverishly to frame draft rules which some say will be presented within a month. These are said to concern the display of fat, sugar and salt on packaging.

According to Reuters, the attendees of the informal summit of industry bigwigs put forward ideas for how “to coordinate efforts and urge the government to resist pressure from health advocates​”.

The wire went on to get confirmation from the All-India Food Processors' Association that its members attended two meetings in February. 

Moreover, it said some of these members “planned to send a joint representation to the government and approach health and food officials to express concerns about stringent regulations​”.

There are fears that the new food policies under consideration would shake the US$57bn segment, especially at a time when many beverage and snack manufacturers have invested heavily in India’s burgeoning economic growth story.

It is predicted that the carbonated drinks market will grow an average 3.7% a year until 2021, while the packaged food sector will grow even faster—by 8% a year over the same period—according to Euromonitor International.

Prime Minister Narendra Modi has made no secret of his desire to be seen to ease India’s double-burden of malnutrition, with an enormous poor population living alongside a growing middle-class currently being riven by alarming growth in lifestyle diseases.

Modi recently advised PepsiCo global chief executive Indra Nooyi to focus more on public health, Reuters reported. He as also asked the company to outline how it would reduce sugar in beverages sold in India.

Meanwhile, Nooyi’s multinational and arch-rival The Coca-Cola Company continue to fight a boycott on the sale of their drinks in the southern state of Tamil Nadu, which has been in place since the start of the month.

The organisers of the action, mainly comprising trade unions and drinks industry bodies, say their protest was motivated by public safety, though it does not apply to Indian soft drinks brands which are just as sweet.

It appears that the boycott has since spread into neighbouring Kerala, although seemingly for other reasons. In a bid to protect the livelihoods of drinks industry workers in the drought-hit southern state, retailers are increasingly stocking only Indian brands, said one local retailers group that represents 700,000 shop owners in the state.

Unlike their Tamil counterparts, the Keralite boycotters cite water shortages as their motivation, echoing the amplifying opinion of commentators that the anger shown towards the big manufacturers has been a red herring. 

The root cause for the boycott isn’t the multinational companies, but the enduring fight between industrial users and farmers, especially in several drought-hit states​,” PL Beena, an associate professor in Thiruvananthapuram, told Bloomberg​.

In response to the Tamil boycott, the Indian Beverage Association has defended Coca-Cola and PepsiCo, saying that they were local companies, and the action went against the government’s “Make in India​” policy.

More stories from India…

96% of Indians dissatisfied with e-commerce labelling laws

Almost all of the thousands of respondents to a recent Indian survey on e-commerce supported legislation to force sites to reveal logistical details of the products they sell.

E-commerce

LocalCircles, a “platform for citizen engagement​”, found that 96% of the 10,000 consumers who voted in its poll wanted e-commerce retailers to outline the manufacture and expiry dates of their foods.

Though it is hard to be surprised by the survey’s results, whereby it is natural for consumers to call for greater safeguards on food, the poll has brought to wider attention the limitations of e-commerce laws. LocalCircles said it would pursue the issue with Indian food-safety authorities.

"We will be taking up this issue shortly with the [Indian regulator] and the Department of Consumer Affairs, requesting them to take immediate action on this matter so all e-commerce sites and their sellers of packaged foods comply with this ask by the consumers​," the online group said in a statement.

In its analysis, LocalCircles claimed the results stemmed from poor standards employed by a number of e-commerce vendors, adding that many customers reported buying goods were close to the end of their shelf-life.

Adding dates and MRP would bring online food purchases in line with conventional retailers, and would serve to increase trust in the channel, it added.

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