Coca-Cola plans £3b India investment to take on Pepsico

Coca-Cola is once again attempting to break through into the Indian market.

The soft drink firm is to push ahead with a £3 billion investment alongside its bottling partners to try and increase its market share and overtake its rival Pepsico.

The investment is expected to be tapered over five years as the company makes a concerted effort to establish itself in a vital growing market.

Muhtar Kent, Coke’s chief executive said: "Our ongoing investment in India is focused on delivering innovation, partnerships and a portfolio that enhances the consumer experience, ensures product affordability and builds brand loyalty to deliver long-term growth.”

Historically, Coca-Cola was a very popular product in india until 1977, but after this time the product was banned because Coca-Cola would not share its secret recipe with the Indian government. The ban lasted until a more liberal government came into power in 1993.

However, the company has faced more criticism since the turn of the century over the health effects of its products and certain Indian states have banned the product due to concerns that some soft drinks have pesticides in them.

Both Coca-Cola and Pepsi have been held up as example of western imperialistic capitalism, especially by the states of Bengal and Kerala which have a long communist tradition.

However, both companies acknowledge that India is one of the fastest growing markets for their products and want to establish their two main products in the territory.

Coca-Cola’s main drink, Coke, has a market share of around nine per cent, whilst Pepsi has a 15 per cent of the market. Both companies own other drinks that command large shares of the soft drinks market.

In total Coca-cola enjoys an estimated 58 per cent of the soft drinks market, according to industry estimates. The company also owns other popular brands such as Sprite. Pepsico has a total 38 per cent of the carbonated drinks market.

Coca-Cola has been investing heavily in emerging markets as consumption in its traditional areas such as the US has declined. In 2011, the company said it would invest $4 billion in China over three years and it has also announced that it will become one of the first companies to invest in Myanmar.

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