Jallikattu protests may dent PepsiCo & Coke sales by Rs 1400 cr

Moneycontrol BureauThe protests against the ban of Jallikattu - a bull-taming sporting event of Tamil Nadu state turned into a mass protests backed by thousands of people in the state and Tamilians across the world forcing the Centre on January 21 to clear an ordinance in an effort to end the protests that had paralysed the state.However, protests continued with a demand for a permanent law instead of an ordinance. According to an Economic Times report, some members of Tamil Nadu traders' associations have decided to stop selling PepsiCo and Coca-Cola products accusing them of exploiting the state's water bodies.The report said major trade associations- Tamil Nadu Vanigar Sangam and Tamil Nadu Traders Federation earlier this week said they have instructed over 15 lakh members, spanning across 6,000 smaller associations, not to sell PepsiCo and Coca-Cola products starting March 1, accusing the firms of “exploiting the state's water bodies to manufacture aerated drinks while farmers were facing severe drought“. This decision is likely to impact the annuals sales of the two beverage giants and cost them around Rs 1,400 crore. The loss would escalate if the ban includes sale of other food items like salty snacks, chips etc. The carbonated drinks industry in India is estimated to be over Rs 1,4000 crore of which PepsiCo and Coca-Cola are major contributors.Furthermore with the government considering a ‘fat tax’ on sugary drinks and packaged snacks high in salt, in the upcoming Union Budget would further impact sales for the companies. Banning sales of any product is the government’s prerogative, said the report.A statement was issued on behalf of Coca-Cola and PepsiCo, which said these actions were not only detrimental to the image of the country but would also mar the long-term interests of the Indian economy. “It is extremely unfair on the part of certain individuals and organisations to propagate misinformation," said Arvind Varma, secretary general of industry body Indian Beverage Association (IBA).On January 23, the Tamil Nadu Governor C Vidyasagar Rao said that a bill to replace the ordinance would be "placed" by the state government in the Tamil Nadu Assembly "immediately."