Coke, Pepsi Join Hands for Beverage Associatione
Ratna Bhushan
Economic Times
July 5, 2010

NEW DELHI: Rivals Coca-Cola and PepsiCo have come together along with other beverages makers and bottlers to form the Indian Beverage Association (IBA), which will be the industry’s single point of interaction with the government and help companies comply with food safety guidelines and other regulations.

Juices maker Dabur, packaging company Tetra Pak, bottling companies Pearl Drinks and Bengal Beverages, energy drink maker Red Bull, and drip and sprinkler systems firm Jain Irrigation Systems too have joined the association, while about 30-40 others including Bisleri International, Parle Agro, Amul, Godrej, bottlers, vendors and suppliers are expected to join in due course.

“Non-alcoholic beverages are on a growth trajectory but so far there has not been a comprehensive organization representing the industry. We felt it’s time,” said Arvind Varma, secretary general of the association.

He said the organisation will be the non-alcoholic beverages industry’s single point of interaction with the food safety authority and ministry of health.

It will help members deal with challenges like complying with the food safety authority guidelines, double taxation, VAT, state-level controversies like allegations of water depletion (as is the case with Coca-Cola and PepsiCo), sugar imports, spurious drinks and more.

“IBA’s formation has been triggered by the two cola companies, Coca-Cola and PepsiCo, since they are the one’s facing maximum flak from regulators — whether it’s VAT in Delhi, charges of water depletion in Kerala or being perceived as only making sugary fizzy drinks by health activists,” said an official directly involved with the association.

Earlier this year, the Delhi government increased VAT on soft drinks from 12.5% to 20% on the category, but companies have not increased prices for fear of impacting demand. They have been lobbying with Delhi CM Shiela Dixit for a rollback because they believe the current taxation would ‘reverse their growth cycle’.

Several beverage makers, bottlers and suppliers ET spoke to said they would join the IBA.

The Indian Soft Drinks Manufacturers Association (ISDMA), represented by the two cola companies, is also being merged with the IBA.

“We are in the process of inviting all affiliates and stakeholders of the non-alcoholic beverages industry to join us,” said CK Jaipuria, president of IBA’s managing committee and a leading bottler of PepsiCo.

The IBA is being set up on the lines of global organisations such as American Beverage Association (which represents 220,000 people accounting for over $110 billion of sales) and British Soft Drinks Association.

The American Beverage Association (ABA) represents beverage producers, distributors, franchise companies and support industries, which make regular and diet soft drinks, packaged water, juices and juice drinks, sports and energy drinks and ready-to-drink teas.

Juices makers expect the IBA to help them expand their market.

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