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Coke's no genie, keep it out of Goa, plead small-bottlers

Sandesh Prabhudesai in Panaji

It is a second shock for Coca-Cola, the world's leading soft drink multinational, in Goa. After its bottler deserted the company last year to join hands with Pepsi, local bottlers are now opposing its mega plant coming up in the tourist state.

"Coke will eat into our 65 per cent market share by resorting to price-cutting and other monopolistic gimmicks," says Rajesh Naik, chairperson of the All Goa Small Scale Bottlers Association.

Similar fears are expressed by over 250 local bottlers. Their main worry is that their annual market of 5 million crates would be eaten up by the multinational, which currently has a market of about 1.5 million crates.

They have already submitted a memorandum to Chief Minister Pratapsinh Rane of the Congress, and are planning to move the Monopolies and Restrictive Trade Practices Commission.

Rane has been urged to emulate Jyoti Basu, his West Bengal counterpart, who disallowed the cola MNC to set up its plant there, to protect the interest of the local entrepreneurs.

Much before the local bottlers could raise their voice, Coca-Cola South West Limited had acquired permit to set up a Rs 300 million modern plant at Verna, with a production capacity of 60,000 crates per day.

Around 25 acres of land have been acquired. The built-up area is likely to be 8,000 square metres. Bore wells would be sunk to meet daily water requirement of 3.2 million litres. "This would also adversely affect the underground water resources at Verna plateau," says Bruno Lourenco, a local bottler.

Coke has assured the government that it will meet half its power requirement of 2,,000 KVA by installing a generator. But small-scale bottlers still feel big plants should not be allowed in times of acute power shortage.

Since the time it has lost the local bottler, Coca-Cola has managed to retain its market share in the organised sector by importing 15,000 crates every day from neighbouring states.

Despite spending Rs 25 on freight charges and Rs 10 on sales tax on every crate, Coca-Cola has been offering 40 per cent discount on crates and a further discount of Rs 16 on every crate to its outlets.

"This is what worries us," says Naik. "Its new unit will get sales tax exemption for 12 years. They would also save on transportation. If they offer further discounts, we will be nowhere."

Local bottlers have been countering, somewhat successfully, the marketing onslaught of both Coca-Cola and Pepsi by offering their drinks at reasonable rates. They also rely on their strong sales networks in the villages.

They have recently pegged their concern on the issue of the future of 50,000 Goans employed directly or indirectly in the local soft drink industry. "Coke's fully automatic plant would hardly generate any employment," points out Naik.