A quickie for the day.
What was the reason behind the Coca Cola Company pulling out its flagship product and other drinks in 1977 from the largely untapped Indian market?
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There are two reasons for this, and most of the answers that came in had both of them!
First, the Coca Cola Company was asked to dilute its stake as per FERA.
Second, it was asked to divulge its recipe for Coca Cola!!
Coca Cola did not wish to disclose it's 'secret ingredient' which the Indian Govt. thought was 'Cocaine' as when Coca Cola started, it did indeed have Cocaine as an ingredient.
ReplyDeleteCoca Cola withdrew from India in 1977 during the Janata Government regime as the company was asked to reveal its formula & reduce its stake as required under the FERA (Foreign Exchange Regulation Act).
ReplyDeleteIt was asked to reveal its secret formula and also to reduce its stake and become an Indian owned subsidy as mandated by the FERA
ReplyDeleteCoca Cola pulled out from India after a new government ordered The Company to turn over its secret formula for Coke and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA)
ReplyDeleteAs a part of intellectual property law Coca-Cola was needed to disclose it's recipie....It didn't want to do dat hence it withdrew from India
ReplyDeleteThey were asked to provide the details of ingredient 'X' which gives Coke its unique flavour.
ReplyDeleteIn 1977, the Morarji Desai government with George Fernandes as industry minister decided to throw the Coca Cola Company out of India as it was refusing to adhere to a particular provision of what was then the Foreign Exchange Regulation Act (FERA). This provision stipulated that foreign companies should dilute their equity stake in their Indian associates to 40 per cent if they wanted to continue to
ReplyDeleteoperate in the country.
little bit of googling..:) thnk u for the qstn..