Coke Takes CPM To Court, Pepsi May Follow Suit

Thiruvananthapuram, May 20: | Updated: May 21 2003, 05:30am hrs
The relationship between CPM and soft drink giants in Kerala has turned into a full-fledged legal spat, with Hindustan Coca Cola Beverages Ltd moving the court against the CPM-headed Perumatty Panchayat. Pepsi India is also considering taking the same course against another CPM-headed panchayat, well-placed officials told FE.

From Friday, production has stopped in Hindustan Coca Cola plant in Plachimada in Palakkad. Perumatty Panchayat had cancelled the production licence given to the plant. On Thursday, Coke had secured a stay from Kerala High Court on the Panchayats cancellation. However, what caused the production halt was not the revoking of licence.

About 700 workers of the Coke plant were on warpath against the Left-driven Panchayat, staging a sit-in in front of the Panchayat office. Embarrassed by workers turning against the party committed to be workers crusader, local left leaders unsuccessfully tried to dissuade the protesters.

Production is affected only because workers had gone to protest the decision of the CPM Panchayat bosses, said a spokesman of Hindustan Coca Cola Beverages in Plachimada.

In the case of Pepsi India, Puthuserry Panchayat has decided to cancel the licence of the Pepsi unit in Kanjikode.

Pepsi brass in New Delhi have been holding parleys with lawyers on how to handle this issue. About 20 per cent of Pepsis market in the state had been hit when last month DYFI - the youth wing of CPM - had called a boycott of select multinational products in protest against US-Iraq war. The retailing is just recovering, but there are still isolated pockets of confrontation, said Mr Giri Menon, Pepsi wholesale dealer.

Kerala government will support the bottling units, in whatever way it is legally possible, Chief Minister A K Antony said, when contacted for comment. It is a pity that CPM backs Pepsi and Coca Cola in West Bengal and fights them in Kerala, he added.

But such developments do little to help in projecting the reformed Kerala image. In fact, the goodwill acquired during the much-publicised Global Investor Meet (GIM) is fast evaporating. Hindustan Coca Cola, which had recently announced a Rs 30-crore expansion plan in the state as part of GIM, has reportedly called off the move.

It was not always ice and chill between CPM and the soft drink giants. On the contrary, it was during previous CPM-led LDF government that the two soft drink majors simultaneously entered the state. Former finance minister and CPM leader T Sivadasa Menon had several times publicly expressed his pride that both Pepsi and Coke had chosen his constituency, Palakkad. But CPMs latest stand is that an internal inquiry in the party is on to find out who let in the bottling units on Palakkad, a district with a depleting ground water table.