Sunday 29 March 2020

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Economy | Industry

Profit-less ego war between Coke and Pepsi


With summer getting hot day by day, the famous war between the Coca Cola and the Pepsi, the soft drink multinationals, is also heating up in the tourist state, playing upon egos and not profits.

The marketing and promotional tactics have crossed its limit by both the rivals announcing series of loss-making schemes and pouring in money like mad on advertising and promotion. No consumer however is benefiting from it in any manner.

The war has begun since November end, when Coca Cola India's local franchise, the Goa Bottling Ltd owned by Timblos, switched over to the Pepsi in protest of the conditions laid down by the Atlanta-based multinational.

As Coke was left without any bottling unit despite holding 65 per cent market in Goa, they started importing its flavours from AP, Maharashtra and Gujarat for last six months, spending Rs 25 to transport each crate. By June end, their losses on transportation would mount to Rs 7.88 crore.

The Coke has now tied up with Supernica Breweries, the Mangalore-based bottler, having production capacity of 10,000 crates per day. But the actual relief would be only when the Coke plant worth Rs 30 crore comes up in Goa by year end, which can bottle 60,000 crates per day.

In addition, the richest multinational in the World has started floating schemes for outlet sellers, each one of which was countered by the Pepsi, which has the bottling units here and determined to end Coke hegemony in the tourist state.

The schemes included offers like one crate free on three crates and even the Yamaha motorcycle for selling around 1500 crates in a fixed period. Presently, the Pepsi offers four free bottles behind a crate while Coke offers two cans and a glass. There are similar offers for the big pet bottles.

"I admit we are not doing business in Goa. But it is a matter of prestige for the world's number one multinational", says a Coke official. "They are spoiling the market. We always play second, of course to compete", states Prabhakar Timble, the marketing consultant for the Pepsi in Goa.

For the Coke, states one official, this is the third instance after Czechoslovakia and Ahmadnagar in the past, where the local franchise bottler suddenly switched over to the rivals. Secondly, being a tourist state, Goa is having the highest per capita consumption rate in the country today.

Being an educated state with 12 lakh tourists of Indian and foreign origin visiting here annually, the Goan highways are seen painted red or blue, including small taverns and shops, railway overbridges and even compound walls, besides hoardings. Even the local feasts nowadays wear red and blue colours.

While the Coke targets all sections of the elite society, Pepsi is wooing only the youngs. To counter Coke's V TV show, the Pepsi last month organised the MTV show. Unlike liquor and cigarette companies in the past, they are the favourite sponsors in Goa today, may it be the beat show, a cricket or football tournament or Carnival or Shigmo festivals.

But despite this, the Coke, the Pepsi and the Dukes hold only half of Goan market, to the tune of 32 lakh crates per annum while the 131 local bottlers still hold 30 lakh market in the villages, mainly because the local products are much cheaper than the elite brands.

It is mainly because the multinationals have no schemes for the common Indian, though they do not mind losing crores to maintain its market monopoly, at the cost of the consumer.

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