New Delhi, January 28: Despite all the loud-talk by Samta Party leader George Fernandes about wanting to get multinationals such as Coke out of the country, PepsiCo Inc's chief executive officer Roger Enrico isn't too worried. Mainly because, he told journalists on his visit to India today, the atmosphere isn't the same as it was two decades ago -- now, most parties want liberalisation.Enrico, who was here to announce the Pepsi bottler of the year award to Ravi Jaipuria who owns Agra Beverages, made it a point to denounce Coke's strategy of buying out bottlers. He said that Pepsi got top quality beverages from its bottlers, and he saw no reason to change this strategy of using franchisee bottlers. Roughly half of Pepsi's beverages in India are bottled by franchisees.
The Pepsi chief also said that while Coke's statement of trying to sell its beverage at Rs 5 a bottle was welcome, he didn't really think it was possible to sell soft-drinks at this price. "If they do it, we will not be found wanting. Wehave the financial resources, and will not hesitate to use them", he added.
While Enrico criticised the high levels of excise and other duties levied on beverages, he was quick to deflect a statement by Pepsi India chief P M Sinha on the high retail margins in the country. While Sinha said that the margins were three times those on other consumer goods, Enrico said that they weren't out of line with those prevailing globally!
Enrico announced that Pepsi, which has already invested Rs 1,000 crore in India in the last eight years, plans to invest another Rs 500 crore, primarily in the beverages business -- investments in food processing would be over and above this. Pepsi has, however, not made any profits so far as it is still amortising large investments made in the past. "The amounts, however, are in line with what we expected and aren't really bothering us", Enrico said.
Pepsi officials also told newspersons that they expect their export turnover this year to be around $600 million (Rs 240 crore),up from Rs 200 crore last year. The much-awaited launch of Diet Pepsi in India will have to wait till the end of this year. The launch of the non-calorie cola was earlier expected in mid-1998 but Pepsi is yet to get the necessary government approvals.
Pepsico India chief P M Sinha said the approvals under the FPO laws usually take three years. Pepsi is hopeful that in the first year of the launch, diet cola will grab 10 per cent of the soft drink market share in India.
Sinha said Pepsi has already submitted a detailed report on the usage of the blend of artificial sweeteners, aspertame and acesulfame, to the government.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
