Why is Coke's Isdell Visiting India?
Shubnam Mukherjee and Chitali Chakravarthy
Times News Network
June 24, 2004

NEW DELHI: There's got to be more than what meets the eye, going by the way Coca-Cola India is treating the visit of its global chairman E Neville Isdell to India.

After initial reports that Mr Isdell was coming to India appeared in print, Coke’s PR machinery in India and its president Sanjiv Gupta went out of their way to assert that Coke’s global chairman was never supposed to come to India this time of the year. “Please go ahead and meet him, I’ll meet you there too,” Mr Gupta told ET on June 19.

Now we hear that the eagle has landed. According to highly placed sources, Mr Isdell landed in the Capital yesterday at 11.19 pm in his private jet, Gulf Stream 5, perhaps the first chairman of any global company of this size to visit India less than a month after taking over as its world-wide chief. He touched down in the Capital with three passengers in tow — one of them is Asia Pacific head Patrick Siewert. Sources say that the Coca-Cola CEO’s jet has already filed its flight plan with the ATC at the New Delhi airport and is scheduled to depart tonight.

That is the story so far. However, this is not the real thing. What is intriguing, and downright suspicious, is the way in which Coca-Cola India has gone about vehemently denying Mr Isdell’s visit. Mr Gupta even went to the extent of saying that Mr Isdell may come here in July and that he would let us know well in advance about his plans.

In the meantime, Mr Isdell, along with Coke’s top brass — Mr Gupta and Sripad Nadkarni — met members of the advisory council over cocktails and dinner. Among those present were Ustad Amjad Ali Khan, who is also a member of the council. ET tracked down Mr Isdell to Maurya Sheraton and camped outside West View, where the top guns of Coke were huddled together till late last evening. Pawan Munjal of Hero Honda, a member of Coke’s advisory council, dropped by to say hello to Mr Isdell and the visiting top execs.

So what’s the real story behind the real thing? Isdell’s visit assumes significance because the outgoing CEO Doug Daft did not visit India even once during his chairmanship between ‘00 and ‘04. In fact, those who understand corporate protocol express surprise that the Coke chief is visiting India at a time when the management structure in the Atlanta headquarters is shaky. “I would imagine him reading the real story behind the real thing in the US,” says a senior industry observer.

One executive of Coca-Cola told us that the top management is keeping the visit under wraps for fear of a possible sabotage. For instance, when the then chairman Doug Ivester came to India six years ago, and visited the markets, all the Coca-Cola hoardings from the points of sale went missing. Others, however, feel that this is too simplistic a view and that there are other important reasons for Coke’s secretiveness. Coke’s top management in India is not very clear about what’s in store for them in the Isdell era.

First, Coke’s company-owned bottling operations (COBOs) in India, numbering 27, are one of the largest in the world. So are the losses at over Rs 2,000 crore. Mr Isdell, a Coke veteran of 35 years with huge interest in bottling operations, may split Coca-Cola India into two clear divisions ­ concentrate and bottling. Whether Coca-Cola India will have two CEOs is still speculative in nature. Isdell has created a new post called president, bottling investments, to directly look after bottling operations in countries where the company either owns bottling or has equity in it.

The new structure will result in a totally new model for consolidated bottling investments by creating what is essentially an internal bottler that will interact with the company’s concentrate business in the same way as independent bottlers. “In the past, I do not believe we have managed our significant investment in bottling through the prism of a bottler,” said a highly placed source in Coke.

In his executive office memo to India dated June 15, Mr Isdell made it clear that “Germany, Brazil and India are strategic investments”. So, as sources point out, India can no longer remain in tier-three of Coke’s global system. Mr Isdell will soon be expecting growth from India where $750m has already been sunk in, buying bottlers and establishing the business.

Further, Coke has been faced with a series of crises situations. First came the allegation about its plant in Plachimada near Palakkad causing environmental pollution and depletion of water resources. Second was the pesticide controversy which jeopardised the company’s business propositions in India for a while.

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