Calcuttta, Sep 28: Coca-Cola India is negotiating with Black Diamond Beverages, its bottler in West Bengal, to develop their alliance into an acquisition or joint venture, as part of its national strategy.Coca-Cola India chief executive officer (CEO) Donald Short told The Financial Express that the company has good relations with the Calcutta-based bottler and is keen to expand in this part of the country. "The market for our brands have grown by 20 per cent in the last one year and we hope that the trend will continue this year too," he said.
On whether his trip to Calcutta was an opportunity to have discussions with the Calcutta bottlers, he said, "Yes, of course. We have a very good alliance with our partners and things will work out in due course," he said.
Short was here on Monday to check out the promotional campaign launched by Coke during the Durga Puja festival in Calcutta.
Coke has been making strong efforts to woo its Bengal bottler, which has two plants. Earlier this year, it clinched itsfirst major deal in east India when it bought over the NK Poddar-controlled Orient Beverages, one of its two bottlers in Bihar.
Last week it gained a strong foothold in Delhi when it bought the units of its biggest bottler, Ramesh Chauhan. The deal included a physical transfer of all assets including the entire marketing personnel, but excluding the land and building. Bharat Coca-Cola, Coke's holding company for the bottling plants in north and east India, now owns the Patna bottling unit.
Coke is also in talks with its Jamshedpur bottler, Short said. Coke has a strong presence in Bihar with about 70 per cent of the market.
The company, since it received the Foreign Investment Promotion Board (FIPB) permission in April 1996 to set up bottling plants, has been trying to either buyout its bottlers or form joint ventures with them.
Coke has set up two holding companies -- Hindustan Coca-Cola Ltd and Bharat Coca-Cola Ltd -- to negotiate joint ventures or acquire the units. Of the 52 bottlers Coke has inthe country, it has managed to get 12 under its fold.
However, the process is taking time owing to the cross-holdings that exist between many bottlers in the same fold and the contractual nature of the employees.
Limca finds fans in Singapore, HK
Limca, Coca-Cola's lime and lemony brand, has the true potential to be marketed overseas. And that is the reason it is finding a good market in Singapore and Hong Kong.
Company CEO Donald Short said, "In fact, it is the Limca brand which seems to have a much better export market against other brands like Thums Up or Coke." Short said the growing market in east India has prompted the Cola major to ramp up spending. "Our thrust will be on regional brand identification for the domestic markets. The eastern market has been a stronghold of Thums Up rather than Coke and hence we wish to keep our major focus on Thums Up followed by Coke," Short said.
Short hinted at a cut in the maximum retail price (MRP) of the 200ml bottle to Rs 5 from Rs 6 at present ifthe excise duties are lowered. The price cut will be slightly less than the excise now charged on the 200ml bottle (40 per cent of half the MRP).
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.