The two largest trade associations in the southern Indian state of Tamil Nadu have proposed a ban on the sale of Coca-Cola and PepsiCo.
The proposed ban does not reflect the position of the Indian government however it highlights how large international brands are seen in the country. And you can see the effect it has had on soft drink sales.[verdict_chart id=”10442″]
Concerns around the alleged detrimental effect to the local environment and regional producers that is caused by multinational producers sparked the proposals.
The Trade Associations claim the local water supply is severely hampered by overuse, which in turn harms local farmers who require the water to sustain their livelihoods.
This is not the first time that Indian states have taken action against multinational carbonates producers.
In 2006, the Indian state of Kerala banned the production and sale of Coca-Cola and PepsiCo products, after a disputed report from the Indian NGO Centre for Science and Environment which claimed the beverages contained harmful pesticides.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
However this ban was quickly overturned.
As an alternative to the large international brands, proponents for these bans are advocating increased support for regional producers and a renewed consumer drive for healthier drinks.
In 2015 the soft drink market in India shrank by around one percent, breaking years of consistent growth in the country.
Nine of the top ten brands failed to record growth for the year.
Consumers opted for more sugar-free soft drinks and as a result, low calorie options saw a 25 percent increase for the year.
A recovery in the overall carbonates market is expected in 2016, however this will be largely driven by a surge in growth for regional products.
Despite the bans failing to gain a legal foothold, the influence the movements have had on consumers has been effective. Many retailers across India continue to boycott the brands.