Even as the global soft drink major — Coca Cola — is still trying to shake off the effect of the pesticide issue in India, the Atlanta-based company on Wednesday said that the controversy had a short term negative impact on its financial performance in India in the year 2003, adding that its unit case volume grew 22 per cent during the year.
“Unit case volume returned to double-digit growth during the fourth quarter (Q4) after the beverage industry slowed significantly during the third quarter (Q3), when false accusations were made that soft drinks contained high levels of pesticides,” the parent company said, announcing its Q4 and full year 2003 results from Atlanta. However, Coca-Cola India spokesperson refused to comment.
In October 2003, while announcing its Q3 results, the company had admitted that its financial performance witnessed a downturn in India following the pesticides controversy. “In India, the beverage industry has been impacted by false accusations that soft drinks contained high levels of pesticides. As a result, the company’s unit case volume declined during the quarter, following several consecutive quarters of strong double digit-growth,” its Q3 results said.
However, the Q4 results announced on Wednesday state that the company has stabilised growth in India, noting a unit case volume growth of 22 per cent during the year 2003. Amongst others, the company makes mention of its ‘affordability strategy’ being pursued in India. “In India, the resilience of the company’s single serve affordability strategy and diverse portfolio of local and international brands was proven, as unit case volume grew 22 per cent during the year.”
For the Asia region, specifically, the soft drink major notes: “Results during the year were balanced across countries, brands and packages, from single-serve package growth in developing regions such as China, India and Thailand to value-added package growth in modern markets such as Australia and Japan.”
“Unit case growth was 4 per cent for the full year and 3 per cent in the fourth quarter, reflecting the cycling of 10 per cent growth during the prior year and the short-term negative impact of SARS and the pesticide issue in India.”
Curiously, PepsiCo, which announced its Q4 results on February 5, is silent about the impact of pesticide issue on its beverages business in India in the year 2003 and Q4.