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P.M. BRIEFING : India Rejects Coca-Cola--Again

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From Times Wire Services

India today rejected Coca-Cola Co.’s bid to re-enter its growing market, from which the soft-drink maker was effectively ejected in 1977.

Commerce Minister Arun Nehru announced to Parliament that he has turned down Coca-Cola’s proposal to set up a plant near New Delhi to make its soft-drink concentrate.

A ministry spokeswoman declined to explain the decision.

The government’s move leaves PepsiCo, Coca-Cola’s main rival, as the only foreign soft-drink firm with a presence in the growing Indian market, now worth $200 million.

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The rejection was the second setback for Coca-Cola in India at the hands of a non-Congress Party government. In 1977, when the first non-Congress government took power, it asked the company to give up 60% of its fully owned Indian subsidiary. The company refused and pulled out of the country. Its bid to return centered on a proposal made months before India’s second non-Congress government since independence took power in December.

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