The LF can't come to terms with Coke's Rs 100 crore project
A Rs 100-crore investment proposal in the Left-ruled state of West Bengal by the all-American Coca-Cola Corporation has bred an entirely avoidable controversy. A dispute that shows up in clear relief the contradictions between an investment-hungry state economy and recalcitrant Left ideology.
The wonder is that such a controversy should arise at all in a state where registered jobless number a record 5.5 million. Ditto the state's record in attracting new investments, an area marked by more media hype than concrete action of any kind. If the credit side is blank, the debits shock any observer. Philips, the Thapar group, Lipton, Britannia, Brooke Bond and Shaw Wallace have shifted their headquarters out of West Bengal, while Dunlop has nearly closed shop. Income tax revenues are down to Rs 1,300 crore compared to Rs 1,600 crore in the recent past. This cuts into the state's share from the divisible kitty, although state finance minister Asim Das-gupta maintains unblushingly that such shifts do not hurt West Bengal at all. Period.
One would think that a new Rs 100-crore infusion in the industrial wasteland of West Bengal would be manna from heaven. One would be wrong. For there are people like industries minister Bidyut Ganguly to contend with. He objects to the Coke project in a state where Coke's rival Pepsi has already set up a unit. The government has not rejected the Coke proposal, but the fact that the industries minister himself has raised his voice against it has created confusion.
To be fair to Ganguly, his objection has some merits. "Black Diamond Beverage are the local bottlers and franchise holders till 1999 for the sale of Coca-Cola in Bengal. They have two factories here, employing about 1,000 people. Now Coca-Cola plans to move in, employing may be 60-70 people and producing four times what Black Diamond may be turning out. In two-three years, Black Diamond will certainly go under and have to close its factories, endangering 1,000 employees. And when that happens, will the media spare us?" Ganguly asks Outlook. No, he had not spoken to the leaders of the militant CITU and he was speaking for himself, not the state government. "In any case, the chapter is not exactly closed and discussions can always be held," added Ganguly.
That does not mean that CITU, feared by all except a handful of Left Front-friendly industrialists, is out of the picture. Says its grey eminence Niren Ghosh: "We welcome investments even from multinationals, but only where they are needed. For instance, I do not see much point in having Kentucky Fried Chicken outlets. How many people want them? Is it a priority item? And, what's wrong with chicken produced here? Between them, Coca-Cola and Pepsi already have a 95 per cent marketshare, leaving only little bits for local producers, some of whom have sold out to them. The point is, do we gain in technology in any way? Why must we surrender to these monopolies?" Then he delivers the clincher: "No indigenous industry ever prospered without active help from the concerned government, whether in Japan or in the US. Why should we have it otherwise in India?"
Interestingly, this does not go down too well with other Left leaders, among them, the pragmatic Somnath Chatterjee, who heads the West Bengal Industrial Development Corporation. With good reason, too. The WBIDC it was that had suggested three sites at Kalyani, Falta and Dankuni for the Coke project. "I did not meet Coca-Cola authorities, but I know they had contacted us for some plot. My point is, legally you cannot stop Coca-Cola or anyone else from setting up a plant once they get permission from the Centre. As for the local bottlers, well, what happens if Coca-Cola do not renew their franchise in 1999? The decision is entirely theirs. In any case, the Indian market accounts for only 2 per cent of the total business done by Coca-Cola. But what sort of a signal goes out to other investors?" asks Chatterjee.
From the owners of Black Diamond Beverage, again, there are confusing signals. According to a section of the press, Black Diamond authorities are confident that Coca-Cola will not let them down or take any steps that jeopardise their interests. On the other hand, the same people are known to have approached the best lawyers in town to figure out future prospects if Coca-Cola moves in on its own. Despite repeated efforts, no one from Black Diamond spoke to Outlook.
Local chambers of commerce have reacted on a low key. Local CII chief Dr Sudhir Kapur says he needs more time to study the objections to the Coca-Cola project. Bengal National Chamber of Commerce sources say they can't understand the basis of Ganguly's fears. "His concern for Black Diamond is understandable, but then there must be fresh investments too, the state needs new jobs. Can it be that there are other reasons besides what Ganguly has told us?" One will hopefully find out before it's too late.