There’s no fizz in the bloody investment talk

Make no mistake, Pepsi, Coca-Cola are in the back-foot and no investments would be reviewed by multi-national firms due to the setback for Colas.


The usual ranting of multi-nationals reviewing investments in India in the wake of action against some states following the alarming revelations by Centre for Scientific Studies should just be ignored.

No sensible MNC would want to ignore a huge opportunity that is India, the only bigger market in the world being Communist China.

In the past few weeks, Wal-Mart, the world’s largest retailer, bowed to the dictates of All China Federation of Trade Unions to allow five trade unions at the organisation’s stores. Wal-Mart has 50 stores which employs 31,000 people in China.

No outburst has come from Wal-Mart after the decision because they know it is the only way they can tap the huge market in China. So there is no use dangling any carrot or stick. Either you accept it or get lost is the Chinese mantra.

Even Google, which swears by privacy laws and defends its right to protect search information in US, bowed to the Chinese regime, though it is another matter that Google’s China search engine could not make much impact against a Chinese competitor.

So if Kerala bans sale and production of Coca-Cola and Pepsi, Wal-Mart wouldn’t shelve its plans to set foot in India. Wal-Mart would only be happy to set shop in Kerala sans Pepsi, Coke. It can mint money from selling anything, not just colas, rather than not being able to set shop at all.

In fact it is aggressively lobbying for that purpose because it doesn’t make business sense to show camaraderie by pulling out or ignoring a huge market to swear allegiance to a firm just because it happens to be multi-national.

Likewise, just because they are multi-nationals and are endorsed by a greedy bunch of Bollywood stars, Coke and Pepsi cannot just have a free-run.

It makes common sense to understand that it is possible or rather easy to live without Colas. They are not vital and hence can be ignored rather than risk a health hazard from a buyers point of view. For the Colas, ignoring India or set backs even in its regional pockets is a huge blow.

So Coca-Cola and Pepsi are at a disadvantage now and not the Indian market vis-à-vis investment potential as is made out to be in sections of media. It is as simple as the fizz when Cola bottles are opened.

Are you listening Indra Nooyi ?