PepsiCo Commitment to India

Amidst the scrambling abroad in response to the Lehman crisis; PepsiCo quietly announce their commitment to a further 500m USD investment in the Indian market over the next three years; which is forecast to triple PepsiCo's existing business here within India over the next five years.

Entering the Indian market in 1988-89, PepsiCo India is currently ranked the fourth largest consumer company in the country. Originally entering via a joint venture with a Punjabi government-owned organisation and another local company, it was initially bound to rename its brand as Lehar Pepsi until the government relaxation of the rules which allowed foreign brands into the country in 1991. PepsiCo consequently bought out their partners, and continued to grow its market share at an impressive rate.

Hampered in recent years by ongoing scandals concerning the quantity of pesticides within their products within India, both the Coca-Cola Company and PepsiCo joined hands in 2005 (with 95% hold on the soft drink market in India between them) to fight the allegations of toxicity within their products that are manufactured here.

Social responsibility for a company of this size, doing business in a developing country such as India is indeed large and should not be overlooked. One would assume that a chunk of the investment that PepsiCo is pouring into India would go to ensuring water quality in its manufacturing plants, and an investment into pesticide residue reduction or the development of alternatives to pesticides to ensure that the quality and standards of its product are as high a standard here, as they have to be in other countries.

The main problem appears to be the unregulated use of pesticides in India, and the ground water which the bottling plants use in the manufacture of its products. Seepage is hard to determine, and difficult to control, however with the current pesticide residue's found in both Pepsi and Coke products being highly carcinogenic and way above acceptable quantities in any other country - it would seem to me that PepsiCo (& The Coca-Cola Company) had a major responsibility to conduct and act on responsible solutions to solve the problem. In other words, their responsibility here goes far deeper than just their stakeholders pockets.

Perhaps working WITH the government to establish regulation of pesticide use and food quality control could be a start??

India ranks among the top ten markets overall in dollar terms for PepsiCo; and being among the top 5 markets in terms of consumer purchasing power. PepsiCo Chairman and CEO Ms Indra Nooyi states that the Indian market is a very substantial one whose prospects PepsiCo were bullish about.

I look forward to seeing the effects of PepsiCo's $500m USD investment into India, and their contribution to the countries growth in a transparent and accountable way.