09 Mar 2017 19:36 IST

‘Coercive steps to prohibit retailers from stocking Coke, Pepsi a dangerous precedent’

TN traders have no right to deny consumers their choice: Arvind Varma, Secretary-General, IBA

Arvind Varma, Secretary-General, Indian Beverage Association, responds on e-mail to questions about the TN Traders’ Association ban on Coca-Cola and Pepsi.

How has the call by the traders of TN to not take stocks of Coke and Pepsi impacted soft drink sales in the State?

It is still early to calculate an impact in percentage terms. In the first week, there had been some mixed reactions, apart from a lot of noise created by the TN Traders’ Association. We know there is consumer demand, hence both large and small format retailers are placing orders with their respective distributors. Retailers are keen to continue stocking and selling the products of Hindustan Coca-Cola and PepsiCo. We believe the choice of a product must always be with the consumer, and any attempt to dictate the choice is both anti-consumer and also anti-retailer. Retailers in Tamil Nadu earn more than ₹400 crore per annum by selling products manufactured by Hindustan Coca-Cola and PepsiCo.

How do you respond to the charges that the cola majors overuse ground water?

There is nothing that can be farther from the truth. Soft drink companies are very visible users of water but by no means the biggest. In fact, Hindustan Coca-Cola and PepsiCo, taken together, use less than 0.5 per cent of the water used by industries in India. Both companies, nevertheless, want to be a part of the solution on water sustainability and water management. They have, accordingly, taken several initiatives to conserve water and harvest rain water. The two have already invested in water conservation and replenishment initiatives give back more water than the quantum of water they use annually.

How are you responding to the traders’ call? Are you having a dialogue with them? What steps are you taking to overturn the ban?

The Indian Beverage Association has already expressed its willingness to engage with anyone that has a diverse point of view, including the TN Traders’ Association. Ample facts and data are available to make the association realise that they are putting their force behind the wrong cause.

What have the companies done to help the cause of water availability in TN?

IBA member companies have skilled farmers and retailers in modern techniques of agriculture and are deeply involved in the welfare and sustenance of local communities. They have adopted local villages, restored water bodies, built check dams, helped in poverty alleviation... Their role in disaster relief and rehabilitation initiatives, especially in the wake of the Chennai floods, is well documented. The two companies help return more water to the country than they use for their manufacturing operations. They are both water positive.

How important a market is TN for soft drinks? What share of sales comes from this state?

Tamil Nadu is an important market not just for business but also on account of the long-lasting bond and the relationships that the two companies have shared with the consumers. Over the last 25-30 years, the two companies have been an integral part of the social fabric of the state. The TN Traders’ Association is setting a very dangerous precedent by resorting to coercive steps to prohibit retailers from stocking Coca-Cola and Pepsi.

They have no right to deny consumers their choice, and retailers their livelihood. Their call is against the proven fundamentals of robust economic growth, and against the clarion call of ‘Make in India’.

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