The Coke Machine - Michael Blanding [119]
Leading the way into the manager’s office, he introduces a local farmer from the nearby village of Karipur named Dudh Nath Yadav. The bottling company has done a lot of good for his village, he says, giving young people employment at the plant. While he says the groundwater has receded in the past four or five years, the farmers protesting Coke have exaggerated the amount, which he puts at only fifteen feet. “They don’t have too much support,” he says of the protesters. Ranjan chimes in, insisting that he has never seen more than 150 people protesting in front of the plant, half of them from the Lok Samiti school.
Of all of the claims that Ranjan makes, the idea that protesters have very little support is the most easily contradicted. Photos, eyewitness accounts, and independent news reports have documented thousands of people at a time protesting in front of the plant in Mehdiganj. And that is neither the first nor the only place that Coke has met opposition in the country. In fact, not since France after World War II has any country shown such vehement opposition to Coke on so many fronts, part of a rocky history that has beset the company for decades.
Coke first entered India in 1958—back when the recently independent country was openly welcoming the investment of foreign corporations. In short order, Coke became the dominant soft drink in the market. The mood of the country changed in the 1970s, however, when a lingering mistrust of foreign powers led to a backlash against multinationals. Then Parliament passed a law requiring companies to divest at least 60 percent of their shares to local investors. Despite the fact that some twenty-two bottling plants were already majority-owned by Indians, the Coca-Cola Export Company that supplied them with syrup was not. Not only did the government demand divestment from the syrup plant, it also required Coke to divulge the recipe for the secret formula, an obvious deal-breaker for the company. Coke’s executives from John Pemberton to Robert Woodruff hadn’t spent so much time imbuing the secret formula with such totemlike secrecy only to throw all of that away for the sake of one country. Reluctantly, Coke packed up and left in 1977.
Into the breach came Thums Up, a drier and fruitier cola made by the Indian company Parle that quickly snatched up the market Coke had left behind. The tide turned back in the 1990s, however; with the new globalization fostered by the WTO and IMF, countries were told that the key to prosperity was privatizing industry and reducing barriers to foreign investment. India relaxed its ownership guidelines, and Coke began exploring a return to the country—which it did in a big way in 1993. Facing opposition from Parle, however, Coke simply bought up the company, along with its brands.
Initially, Coke set out to create an anchor bottler similar to other parts of the world—but it ran into resistance from the bottlers already existing in the country, which refused to sell out or merge. By 1997, Coke shifted tack to build its own bottling system under a new entity called Hindustan Coca-Cola Beverages Pvt. Ltd., which now directly runs approximately half of the bottling plants in the country. The Indian government allowed the company under the stipulation that at least 49 percent of shares would be sold to Indian shareholders by July 2002.
Almost from the beginning, Coke’s return to India was a disaster. Soft drinks had never caught on much in India outside an urban middle class that made up only 10 percent of