Precisely a year ago, traders across Tamil Nadu unanimously took a stance that they would not sell soft drinks from the house of Coca-Cola and PepsiCo. But now almost all small shops, retail outlets and restaurants have started stocking soft drinks from these two brands.
An analysis done by The Hindu reporters in key districts including Chennai, Madurai, Coimbatore, Erode, Salem and Tiruchi shows that sales dipped in the initial three months (March 2017 to May 2017) of the self-enforced ban, but, later, traders faced various challenges and a section of them backed out. Last year, more than 15 lakh members of the trading fraternity from 6,000 small associations decided to take these products off the shelves.
The idea of banning these brands was born during the jallikattu protest in January 2017. The protestors had alleged that MNCs were exploiting the the State’s water resources at a time when farmers were facing severe drought.
“After the ban, we started procuring home-grown brands. The first challenge we faced was storage. Both Coca-Cola and PepsiCo provide refrigeration facilities and we stocked other products like milk, curd and butter in it. Home-grown soft drinks could not afford to give us the right infrastructure which was a big challenge,” P. Dinesh, a trader in T.Nagar, said. Traders also say that the margins are quite good and one can made good profits selling these two brands.
‘Teething issues’
A. M. Vikrama Raja, President, Tamil Nadu Vanigar Sangangalin Peramaippu (TNVSP), who was instrumental in introducing the ban last year agreed that the products are back in the market but are being sold only by “a few people silently”. According to him, there were teething issues. One was that home-grown players could not spend on advertisements and marketing like their multinational rivals. Secondly, storage, infrastructure and logistics was a concern. “Supply was also a constraint. Except for a few home-grown players, many could not produce in huge quantities,” he said, adding that this does not mean the battle has ended.
“We will soon be meeting the State government and we will ask the government to support us and the home-grown brands. We will ask the government to help us with storage and also give some kind of subsidy for local soft drink players who are contributing to the State’s growth and providing employment for several people,” Mr. Vikrama Raja said.
Harish Bijoor, Brand Expert and Founder, Harish Bijoor Consults Inc, said, “The trader wanted to be the decision-maker in a terrain that is really the turf of the consumer. And that was the fault. The protests by traders seemed motivated.” He added, “If anyone had and has the right to protest on this count, it is the end-consumer. I think the consumer and his choice has prevailed.”
Local brands
In Erode, V.Kumaresan, a shopkeeper, said, “There are no strong substitutes (soft drinks) for these brands.” In Tiruchi, shops sell these brands and at the same time house more than 60% of regional brands from Kalimark and local players in this region.
Traders selling beverages in tourist spots like Kodaikanal, Rameswaram and Kanyakumari claimed that consumers, especially youngsters, insisted on buying Coke or Pepsi rather than the local drinks. Tamil Nadu Chamber of Commerce and Industry Senior President S. Rethinavelu said: “In a new-age market, we have to face competition and survive. However, before permitting the MNCs to sell their products, the government should frame guidelines to protect local players.”
( With inputs from L.Srikrishna from Madurai, S. P. Saravanan from Erode and C. Jaisankar from Tiruchi )
