Wednesday 16 October 2019

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Economy | Industry

Pepsi may take over bottling in Goa & Karnataka

 

Pepsi Foods Ltd, one of the biggest soft drink multinational, is likely to take over bottling operations in Goa and Karnataka, from its three-year old franchise bottler, the House of Timblos.

Surprisingly, the proposal in this regard has reportedly been sent by the Timblos, whose Fomento Group is a leading mining firm here and owns Cidade de Goa, a major five star resort at Dona Paula, near Panaji.

Prashant Timblo, the managing director of the Goa Bottling Company in Goa and Nectar Beverages Ltd in Dharwar, however is still non-committal on the issue. Though he hesitated to come on line to confirm it even after frantic efforts, his office also did not deny the news.

The proposal sounds little surprising because the GBC had overnight shifted its franchise operations from Coca Cola India to Pepsi three years ago when the Atlanta-based multinational had forcibly tried to take over their bottling operations in Goa.

As the tourist state marks second highest per capita consumption rate of soft drinks in India, 62 per year than the national average of 52, the marketing war between both the soft drink MNCs here sometimes takes even non-profitable turns, with a sole aim to retain its market share.

Among the two MNCs, the Coke is still having an upper hand by holding 56 per cent of market share. But with the GBC shifting over to Pepsi in November 1997 and Coke forced to import all its bottles from outside Goa till recently, the Pepsi managed to increase its share to almost 44 per cent from mere 30 per cent three years ago.

The GBC in Goa also handles marketing operations of Pepsi in the three Konkan districts of Maharashtra. Besides its own plant with an annual production capacity of 3.5 million cases, Timblos are also marketing bottles of Universal Beverages Ltd, the old franchisee owned by the House of Dempos, having capacity of 1.8 million cases.

The 11-year old NBL situated in Dharwar, on the other hand, looks after marketing of seven districts in the North Canara regions of Karnataka. Its production capacity is also not less than three million cases.

It is still not known why the Timblos have suddenly changed their mind to put a stop to their 33-year old bottling business, which was a monopoly till the Coca Cola set up its mega plant in Goa in March last year. The deal however is bound to cost the Pepsi at least Rs 70 crore to directly compete with their red rivals in Goa.

Timblos are one of the few industrialists who had openly defied the Coke three years ago when the MNC gave an option to all its 53 bottlers either to sell their unit or become a partner in their joint venture. "Don't ask the farmer to sell his land; tell him to produce more efficiently," the Timblos had said at that time.

Having an upper hand in bottling and marketing products of Parles till the Coke tied up with them to stage a comeback in India, the GBC played a major role in popularising Coke among the locals as well as tourists coming to the coastal state from all over the World.

As the GBC shifted to Pepsi, the Coke had to struggle hard to counter the Pepsi's aggressive marketing strategies. They were getting bottles from the neighbouring states by spending on transportation and storing while selling at much lower price with lots of incentives, similar to the ones offered by the Pepsi.

The Hindustan Coca Cola Bottling Southwest Pvt Ltd has now commissioned a 30-crore mega plant in Goa, having production capacity of 60,000 cases per day. The plant got plunged into controversy when all 125 small local bottlers protested against setting up of a plant in the tourist state, granting them holiday in sales tax as well as income tax.






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