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Coke & Pepsi Fizzing Out In India; Sri Lanka to Grab the Opportunity

Coca-Cola has expressed their interest in setting up a production hub in Sri Lanka and export to India.


Coca Cola and Pepsi, the soft-drink magnates have been facing strong boycott by traders in southern states especially in Tamil Nadu and soon Kerala could also ban their products from March 15th, Wednesday.

The boycott call comes at a time when Indra Nooyi, PepsiCo’s global chief, who incidentally hails from Tamil Nadu, was on a week-long tour to India to discuss investment proposals with  PM Modi.

The traders' bodies – the Tamil Nadu Vanigar Sangam and the Tamil Nadu Traders Federation – had taken the decision to not sell the MNC giants' products from March 1 soon after the Jallikattu protests in the state.

This is not the first time two of the biggest trade unions in India, have called for boycott against the beverage brands. Earlier they stood up against the use of pesticides in the product in 2006, after a report was released by the Centre for Science and Environment (CSE). The report found an average pesticide residue of 11.85 parts per billion in 57 samples of Coca-Cola and PepsiCo drinks produced in 12 Indian states.

According to a report in The Hindu, the call for boycott was in solidarity with retailers of Tamil Nadu and Karnataka. The recent development suggest the Kerala government has announced restricting the use of ground water by PepsiCo., owing to the severe drought conditions in the state.

Both the drink giants have been accused of exploiting ground water tables in Tamil Nadu and Kerala and also of taking away profits from India while themselves being foreign companies.

Pepsi has rejected allegation of "misuse" of ground water and said abstraction of water by the company has not affected bore-well, open well and groundwater discharge structures in any village around the plant, PTI reported. Coca Cola so far has not responded to the ban yet. However, the International beverage company Coca-Cola has expressed their interest in setting up a production hub in Sri Lanka and export to India.

Considering the facts, India has the highest demand for Coca-Cola products in the South Asian region. It is being said that Sri Lanka could earn a huge sum of foreign exchange while generating job opportunities for the youth. Though the Sri Lankan government is quite pro to the idea having foreign, the investors are concerned about the stability of taxation of investments.

Previously in 2015, the Sri Lanka government had suspended the environmental protection license of Coca Cola and later reinstated after the company addressed oil seepage into the Kelani river and agreed to pay compensation for the damage.

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