The Hindu Business Line : Coke chief pays flying visit to India

THE Chairman and Chief Operating Officer of the Coca-Cola Company, Mr E. Neville Isdell's flying visit to India comes amidst the company's local operations being mired in controversy over extraction of ground water and allegations of pesticide residue.

The difficult business environment here, more than the future of bottling operations, is believed to have been Mr Isdell's primary agenda in choosing India for his first overseas visit within less than a month of assuming office, say sources in the industry.

The fact that he met with members of the India Advisory Board, which itself was set up in the light of recent controversies, was indicative of Mr Isdell's concern over managing the business environment in India, sources claim. After all, the future of bottling operations can hardly be expected to be engaging the attention of the Advisory Board, sources added.

But the restructuring of bottling operations appears very much in Coke's scheme of things, since Mr Isdell is seen as a bottling expert by the beverage industry. Industry sources said it was possible that, to begin with, the Franchisee Owned Bottling Operations (FoBos) would be asked to report to either a regional headquarter or directly to Atlanta.

As of today, 70 per cent of Coca-Cola's bottlers in India are CoBos (Company Owned). Mr Sanjeev Gupta, Division President of Coca-Cola India, heads the company's operations here, including marketing as well as bottling, but if a bottling operation realignment is brought about, he could well be left with just the marketing responsibilities. As per a release posted on the Coca-Cola Company's Web site, the combined investments in Coca-Cola bottlers across the globe have a current market value of more than $11 billion.

Besides, a controversy which erupted last year over pesticide residue and on which a final decision by the Government is still pending, Coca-Cola India is also embroiled in a long-drawn controversy in Kerala on illegal use of groundwater. Similar extraction of ground water in Kaladera, Rajasthan, has become controversial.

Earlier this year, Coca-Cola India constituted an `India Advisory Board' headed by the former Chief Justice Mr B.N. Kirpal. The Board was supposed to give direction to Coke's environment policies in India.

Mr Isdell is also the first global chairman to visit India after the domestic operations were forced to divest 49 per cent to resident Indians last year, since their repeated pleas with the Government to waive the mandatory divestment condition due to mounting losses were not entertained. The divested shares were privately placed with a clutch of investors besides its employees.

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