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Sanjiv Gupta may be on his way out of Coke

01-July-2005
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Sanjiv Gupta may be  on his way out of Coke

In a top-level shake-up, Coca-Cola India president Sanjiv Gupta is likely to leave the high-profile soft drinks company after a stint of eight years. Coca-Cola, which is going through a rough phase globally, is restructuring its Indian operation under two CEOs, both likely to be expats. Sources said the new management team, including a new expat CFO, will take over shortly.

When contacted by ET, Mr Gupta said: “As of now, I have not resigned. I cannot comment on the future.” Sources added that he will be with Coke for three months to facilitate a smooth transition. Mr Gupta, 44, joined the company in 1997 as its marketing head.

Those who know him, and the company, give him the credit of aligning the focus of the company with the realities of the Indian market. However, things have been tough for him for the past two years.

Apparently, Mr Gupta fell out with the new management of the Atlanta-based cola company over the Indian subsidiary's future strategy. Sources added the head of operations, Vipul Saurav, is slated for a posting abroad. In all probability, he would be replaced by John Eustace, who has come from Coca-Cola Hellenic Bottling Company, one of the world's largest bottler of Coke products.

When Mr Gupta took over as CEO in July '03, he was the second Indian to head Coke in India. The first was American-Indian Jaidev Raja. Analysts have often accused Coke for its incoherent leadership.

Unlike Pepsi, which had an Indian at its helm for more than a decade, Coke has changed several CEOs. When Mr Gupta leaves, he would be the fifth CEO in 11 years. After Raja, it was Richard Nicholas III, Donald Short, Alex von Behr and then Mr Gupta.

Coke's new global CEO Neville Isdell has taken the view that the Indian operation should change the management structure and hive off the loss-laden company-owned-bottling-operations (COBOs) under a separate head. In this scenario, Mr Gupta's scope of work would have been limited to looking after the concentrate division, marketing and innovations.

According to sources, this arrangement was not acceptable to Mr Gupta. This apart, said unconfirmed sources, there were other areas of disagreements.

For instance, Isdell did not buy the big idea of selling soft drinks in small 200ml bottles. He is in favour of pushing 300ml bottles because he believes that it generates volume and increases the company's profitability.

Isdell, it is believed, is also not very hot on Coke's rural focus in India.

India's importance in Coke's scheme of things was evident when it was part of Isdell's first overseas tour as global chief. Last November, after a six-month review of operations worldwide, Isdell, a 36-year veteran at Coke, said India, China, Russia and Brazil would be expected to contribute 41% to the cola company's carbonated soft drinks growth by '08. At present, they contribute 14%.

He said in the long term, 95% of the business will come from outside the US. Not surprisingly, Isdell is taking special interest in India for accelerated growth. That did not seem to come through.

Industry sources said that Isdell is being too optimistic about India. Life hasn't been normal for both Coke and Pepsi ever since the pesticides controversy broke out. Lalu Prasad Yadav's proposed ban on aerated drinks on trains and stations have added to the trouble.

Global food giants are drawing scathing attack from yoga gurus who have been underscoring the ill-effects of packaged food such as aerated drinks, fast-food chains, chocolate and preserved ready-to-eat items.

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