CHENNAI: Carbonated drinks marketed by global multinationals Coca-Cola and PepsiCo face risk of being pulled out of the shelves in Tamil Nadu as retailer activism batting for indigenous brands has reared up again, two years after similar action in the state resulted in drastic sales drop for foreign brands.

Supply-chain players wield enormous clout in Tamil Nadu, sometimes putting global FMCG brands in the throes of adverse sentiment for their market reach and success in the state. On the back of the Jallikattu protests in early 2017, the Tamil Nadu Federation of Trader Associations decided to ban products of Coca-Cola and PepsiCo for their “indiscriminate use of ground water in manufacturing, use of harmful chemicals, and need for promoting local brands.”

While trade sources say the ban could take effect in August this year, retailers are uncertain whether the ban will be a total one.

The city manager of a large FMCG retail chain in Chennai, on conditions of anonymity told ET: “One needs to wait and watch if this ban by traders can be sustained. Last time, our stockists resumed supply within weeks, and in a few months, it was business as usual.”

There are 15 lakh retailers under the association that has announced the boycott.

Organisers of the ban say small shopkeepers are supplied with subsidised – or sometimes free – refrigerators to stock up global brands, which obliges to keep retailing the products. “We are talking to local refrigerator manufacturers for supply. This is to ensure shopkeepers are not forced to stock up on the products of Coca-Cola and Pepsi just for the subsidised cooling machines. We will announce the date of the ban after we secure these contracts,” Vikrama Raja, leader of trader front which announced the ban, told ET.

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Tamil Nadu has been a tough market to create a lasting connection for bottled drink manufacturers.

For example, a public interest litigation in November 2016 won a stay on Cocal-Cola and Pepsi plants drawing water from the Tamirabarani river in southern Tamil Nadu. It was, however, later overturned by the Madras High Court.

The 2017 boycott started with small shopkeepers and slowly spread to large departmental stores too, who offered clearance sales of these brands to finish off inventory.

The Indian Beverage Association, in a statement then, had expressed disappointment that the boycott was restricting consumer choice in Tamil Nadu.





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