Jan 8, 2020
Coca-Cola had announced the sale of some of its plants in Northern India to franchisee bottling companies last month.
According to the sources, manufacturer of Coca-Cola, Thums Up, Sprite and Maaza mango drink is learnt to have sold off 10% of its company-owned bottling operations in four markets in North India to its existing franchise bottlers.
The Labour Commission is looking into the matter and will try to resolve the standstill in some Coca-Cola bottling plants in Northern India due to employee unrest following the leading beverages maker’s decision to divest its plants to independent franchise bottlers, as informed by the spokesperson aware of the situation.
After some unrest, the matter came to the labour and employment ministry’s immediate attention after the employees from some Coca-Cola’s biggest plants in Northern India expressed that they were not informed prior to the sale and that they would no longer be Coca-Cola employees, instead they would be transferred to work with independent bottling companies.
The officials also informed that operations at Coca-Cola’s Dasna and Varanasi plants have been suspended due to the unrest.
Coca-Cola had announced the sale of some of its plants in Northern India to franchisee bottling companies last month.
The employees have come up with certain demands, one of them said, “The workers’ demands included job guarantees, security against job losses, compensation if the workers want to opt out to work with the independent bottlers and settling pending dues”.
A spokesperson from Coca-Cola declared that the company did take care the interest of the workers while selling the plants. “The workers remain valued members of the Coca-Cola family, and the local bottlers have committed to ensuring their pay and benefits remain unchanged,” said the official.
The official also informed that the readjustment enhances existing capacities, supply chain, brings further investments and improves distribution routes through neighboring zones.
Coca-Cola’s largest existing independent franchise bottler, Moon Beverages has acquired the majority of Coca-Cola’s bottling operations from company-owned bottler Hindustan Coca-Cola Beverages (HCCB). Endorsed by MMG Group of diversified entrepreneur, Sanjeev Agrawal, Moon Beverages has acquired HCCB’s bottling regions in Delhi-NCR and western UP.
The Ladhani Group, another large bottling partner of Coca Cola, has acquired bottling territories of eastern UP, while a smaller territory has been acquired by the Kandhari Group.
This crucial decision to refranchise and distribution of bottling operations is in line with the US beverage giant’s strategy to divest asset-heavy operations across world markets. It is aimed at bringing down fixed costs by reducing number of employees and built-in costs of distribution, leading to higher profitability. Including HCCB, Coca-Cola’s bottling network in India encompasses 14 bottlers.