India’s Cola Makers Seek to Bar Pepsico

Soft-drink manufacturers urged the government on Wednesday not to allow Pepsico to start selling its beverages in the country, claiming that the U.S. company would destroy the domestic industry and leave a million people jobless.

Pepsico disputed the contentions, saying it would drive growth in the industry and employ thousands of Indians. It also said that it had been approached by an Indian state and that the proposed joint venture was intended primarily to develop agricultural processes.

“Why do we need Pepsi? We managed to develop our soft-drink industry, and the government should protect it,” soft-drink maker Charanjit Singh told a news conference. Singh is managing director of Pure Drinks Co., which manufactures Campa Cola, one of India’s most popular soft drinks.

Failed Earlier

Consumers rejected Pepsi-Cola when it came to India in 1956. The company left India voluntarily in 1961 because the product didn’t appeal to Indian tastes.

The “block Pepsi” movement comes just as Prime Minister Rajiv Gandhi’s government is trying to liberalize economic policies and encourage U.S. and other foreign investment.

It also follows the announcement of a proposed $20-million joint venture between Pepsico, a top Indian industrial house called Tatas Co. and the Punjab state government.

The federal government still must give its final approval and issue an import license to Pepsico, which is the United States’ second-largest soft-drink maker after Coca-Cola Co.

The Indian manufacturers fear that the concession will end their monopoly in the domestic market and open the door to additional foreign competition.

Opposition lawmakers criticized the agreement in Parliament this week. They said India cannot afford to waste precious foreign exchange on a foreign, non-essential product while neglecting urgent industrial development.