
When India Kicked Out Coca-Cola, Local Sodas Thrived - samdung
https://www.atlasobscura.com/articles/what-is-thums-up
======
mmsimanga
Ha, I have seen this story before. Zimbabwe my country of birth has screwed
the economy so bad that no sane person/company is going to invest there. The
result is most of the big players have pulled out and all manner of cottage
industries have sprung up. I have watched a woman manually pack popcorn
packets in her kitchen, all manner of workshops exist to repair electronics
and car parts (I live in South Africa (SA) where the old part is mostly just
thrown away). In Zim, people make bricks the old fashioned way with not a
single piece of automation. Just shovels, wheelbarrows, brick moulds and mud.
Without the big players small players can play a role. Zim has taken it too
far though, making business conditions nearly impossible without bribes...

~~~
sombremesa
India is the same way, no sane person should invest there. They sweetened the
pot for the tech sector and then pulled out the rug from under them recently.
Wasn't unexpected for anyone who understands Indian politics, but the foreign
investors really got screwed.

As for locals, greasing palms is the only way to get a business going. Or
anything done, really.

~~~
victor106
IMHO Very very long term India will do well.

In the short to medium term however investing in India is extremely risky. The
primary reason is lack of trust and dishonesty at a fundamental level.

Law enforcement and judiciary are a joke. I heard it’s not uncommon for court
cases to take 20-30 years. The institutions that promote a trustworthy
transactions are nearly absent or ineffective.

~~~
davchana
Most of the affected people would love 20 years. The saying goes that son will
get to hear the verdict in case his father filed.

------
sct202
The end is interesting that after the protections were lifted, Thumbs Up and
Limca were quickly bought out by Coca-cola for a paltry sum of money ($40m).
Seems like all those protections were for nothing in this case.

~~~
amrrs
An addendum that in South India, there's a brand called Bovonto (from Kalimark
a very old desi brand) and it has really thrived despite the presence of Coke
there. The reason I guess is that it's simply making available to appeal and
making it appealing like these corporate brands. Availability in many
different sizes and almost everywhere from a small petty (box) shop to a
decent sized Bakery

[https://en.wikipedia.org/wiki/Bovonto](https://en.wikipedia.org/wiki/Bovonto)

~~~
ssivark
Bovonto and "paNeer soda" are two of my favorite drinks one finds in Tamil
Nadu and hardly anywhere else! (both are Kali mark products)

On a college trip to Rameswaram (southern Tamil Nadu) to watch the 2009 total
solar eclipse, I got a whole bunch of friends (~20 people) to try out Bovonto,
and boy, were they hooked! It's a pity that we couldn't find any once we left
the region.

~~~
amrrs
I didn't know that Bovonto existed even then. I knew about their Paneer Soda
(which they've rebranded now). Anyways, Bovonto would make a great case-study
for Entrepreneurs and MBAs how to grow an in-house brand and compete with
Global brands.

------
Andre607
Reminds me of how when due to the Allied embargo Coca-Cola couldn't be made in
Nazi-era Germany, so Coca-Cola GmbH developed Fanta:
[https://www.thelocal.de/20170523/fanta-how-the-nazi-era-
drin...](https://www.thelocal.de/20170523/fanta-how-the-nazi-era-drink-became-
the-world-famous-brand)

------
cm2012
Normal economic theory says protectionism makes the pie smaller for everyone -
since the best companies, with the most productivity, don't get to compete on
a level playing field.

But when the product is soda (bad for you), it's probably better to have less
efficient/productive suppliers - you want worse and more expensive companies
to be providing it.

~~~
groestl
> economic theory says protectionism makes the pie smaller for everyone

This theory is really lacking when it comes to modeling the effects of real
world protectionism.

Imagine a country A, with all the natural resources, a country B, with a well
developed pharma industry, and a country C, hosting an industrial sector.

Without protectionism, the pie might be large, but most of it is allocated to
country B and C. Country A ends up with depleted natural resources, no
factories, and a trade deficit which denies them access to drugs and
industrial goods.

With protectionism, country A can manage their trade deficit, which allows
them to bootstrap the industry it direly needs as soon as all their natural
resources have been mined and exported.

~~~
skookumchuck
If that were true, when we impose sanctions and embargoes on countries, their
economies would surge.

~~~
groestl
It's readily visible that Country A wouldn't go anywhere without trade, so I
don't know why you would think that sanctions and embargoes (which are
actively hostile to a country's economy) are a drop-in replacement for
protectionism in the model. There are a trillion ways to tie your shoes wrong,
and only a handful ways to do it right. It does not help when the one who does
the tying is the one who wants you to fall.

~~~
skookumchuck
They can always trade their labor and offer a business-friendly legal
environment. They can also borrow money to start businesses.

------
astazangasta
I highly recommend the writing of Ha-Joon Chang, a heterodox economist, on
this subject. He discusses how all of the advanced economies that now advocate
free trade used protectionism to develop their native industry and gives the
modern example of South Korea, which developed rapidly over 50 years by
protecting its native industry.

------
jameane
This makes me super curious about trying this Indian sodas.

"Thums Up was the most distinct, being fizzier, spicier, and less sweet than
the others"

~~~
alienreborn
Available in most Indian groceries or restaurants in US if you wanna try.

~~~
jameane
I haven't seen it where I live, but I am now inspired to pay more attention to
that portion of the menu. :D

------
SilasX
When Austin kicked out Uber and Lyft, local ride-(hail|shar)ing apps thrived.

[https://www.bbc.com/news/technology-41450980](https://www.bbc.com/news/technology-41450980)

~~~
wavefunction
One quibble, Austin didn't kick Uber and Lyft out, they refused to pay for
fingerprinting ride-hailing drivers and suspended operations on their own
accord.

~~~
SilasX
True, I was just trying to maintain the parallelism with this title :-P

------
skizm
I mean, if you ban the largest manufacturer of any highly addictive substance,
the next companies in line will obviously thrive, right? If you banned the
sale of soda, local sodas will still thrive.

------
aluminussoma
There are Indian products that can be superior in taste to their Western
equivalents. In my opinion, Thums Up and Limca are not those products. I'm
going to pick a Pepsi or Coke if taste is the most important factor and I want
a soda.

~~~
markdown
I found Thums Up to be foul. Maaza (the mango juice) was my jam though!

------
ryanjodonnell
This is exactly what China has done with its tech industry - ban the foreign
competition and allow the local companies to flourish. Not a bad strategy if
you have a sufficiently large market.

~~~
DINKDINK
The policy is called Protectionism
([https://en.wikipedia.org/wiki/Protectionism](https://en.wikipedia.org/wiki/Protectionism))
and is a subsidy paid by local consumers to local producers. It biases local
producers towards less naturally-profitable production and is a market shock
whenever instituted or removed.

~~~
deogeo
A subsidy that buys you increased local tax income, jobs, economic
development, maintenance and development of knowledge, and makes you less
vulnerable to foreign economic pressure.

~~~
DINKDINK
By this reasoning, an economy which banned all imports would thrive more than
one where trade wasn't micromanaged. Do you believe isolationism is a wealth-
maximizing strategy?

>makes you less vulnerable to foreign economic pressure

Should someone in the city block next to mine be allowed to sell in mine? How
about the next town, state, country, continent? Where ever you draw the line
is who you've --implicitly-- declared economic war with.

~~~
deogeo
Reduced trade and economic interference does not equal war. And just because
the strategy doesn't make sense when taken to the very extreme, doesn't mean
it's not good in small amounts - the dose makes the poison.

But why argue theory when we have empirical evidence. From
[https://en.wikipedia.org/wiki/Comparative_advantage#Criticis...](https://en.wikipedia.org/wiki/Comparative_advantage#Criticism)
: "none of the world's most successful trading regions, including Japan,
Korea, Taiwan, and now mainland China, reached their current status by
adopting neoliberal trading rules."

~~~
DINKDINK
>economic interference does not equal war

Please tell me how you are able to interfere in trade without violence.
Interference necessitates violence. If country A has a ban on products from
country B, country B sends a ship with products to country A. To enforce the
ban, men with guns from country A are going to detain the ship.

You are arguing for a paradigm where the crew on the ship should be imprison
or arrested (or worse) when they have aggressed against no person nor their
property.

~~~
deogeo
By that logic, the very existence of borders means war. Or are you making the
point that ultimately, all authority derives from violence? Including the
authority to enforce contracts and private property?

And I have no clue where you got the idea the crew would be worse than
arrested. This has happened before, you know - they're simply not allowed to
unload the ship or enter the country. By the dreaded _men with guns_.

~~~
DINKDINK
>are you making the point that ultimately, all authority derives from
violence?

Authority is different from aggression. If Alice and Bob, ex ante, agree to
have Mandy the mediator settle a contract they have willingly given her
authority. Mandy's authority does not depend on a violation of two-party
consent.

>they're simply not allowed to unload the ship or enter the country

The implicit action is that they'll be shot or imprisoned if the refuse to
follow the orders.

If I own the dock and then the political establishment changes who I can
associate with "Anyone except those foreign devils from Country B!" they have
effectively stolen from me (called a Taking). I used to have a product that
could do X and Y and now only X. Saying that I'm free to immigrate to a
different country is theft apology.

~~~
deogeo
You knew the terms of business in Country A when you bought the dock there. If
you don't like them, you're free as in Free Market to do business in a country
you prefer better.

------
TheMagicHorsey
India suffered economic malaise from 1975 to 1995 as a result of this and
other protectionist schemes. As the economy stagnated the population continued
to grow. As a result, there was a severe rivalry over resources in society.
The real salaries of bureaucrats and private sector workers fell in real terms
over those decades. And as a result of this corruption skyrocketed and India's
public institutions were ruined.

You should never go full socialist/protectionist in this way. India is a good
example, even if you don't want to learn from Communist China pre-1980s or
Russia in the Soviet era.

~~~
seanmcdirmid
Socialism has little relation to protectionism; eg the current president of
the USA is all for the latter and not at all for the former.

~~~
xxpor
Marx was actually in favor of free trade:

But, in general, the protective system of our day is conservative, while the
free trade system is destructive. It breaks up old nationalities and pushes
the antagonism of the proletariat and the bourgeoisie to the extreme point. In
a word, the free trade system hastens the social revolution. It is in this
revolutionary sense alone, gentlemen, that I vote in favor of free trade. -
Karl Marx, On the Question of Free Trade (1848)

~~~
briandear
So in Marx’s view, free trade is actually a bad thing. He is for it just like
someone might vote for termites if their objective is to destroy a building so
they could have power over how it’s rebuilt and who gets to live in it. Good
for him, bad for the building and the people currently living in it.

------
BerlinWall
> Yet when the Berlin Wall fell, East Germans ditched their Vita-Cola for
> Coca-Cola.

You can still get Vita-Cola and Club-Cola in Berlin, it wasn't ditched
entirely. People drink it for nostalgia. Coca-Cola tastes far better though,
as do probably a dozen other brands on the market.

------
thisisit
There was also a MNC which did not leave the country and divested its share.
That company was the Indian branch of Unilever called Hindustan Unilever Ltd.
(HUL).

It actually debuted on Indian stock market in 1977 at the price of Rs. 17

Today HUL is the largest FMCG company in India.

------
novaleaf
in 2012, a somewhat similar event happened in Thailand with Pepsi.

Somehow the local manufacturer+distributor of Pepsi products didn't renew it's
agreement with Pepsi, and as a result began distribution of it's own line of
products "est".

Here's an article about it: [http://bangkokhasyou.com/what-is-est-
cola/](http://bangkokhasyou.com/what-is-est-cola/)

------
m3kw9
When you don’t have a giant corp who can lower price on what is basically a
commodity, local people would win

------
mehuln
This story is so misleading that it's sad. I grew-up in the socialist India.
It was called "the Raj." India was a social democracy from its birth in 1947
to 1991. It was on a verge of collapse as someone mentioned below, and IMF
gave it a loan of $300M on a condition that it adopts capitalistic policies.
Since then India has grown at a much better rate...

Also, let me tell you about what state of Indian in 1994 when immigrated here
as a kid:

\- We had three models of the cars - Fiat and Ambassador. These two had not
changed its model for 30+ years. The new Maruti Suzuki was the third model
introduced thru join-venture. Maruti was the first model with power steering.
None of the available cars were automatic...most cars in India today are still
not automatic as lot of those innovation never made it to India during the
socialist Raj. In USA back then, there were at least 100s of models with far
advanced technologies.

We had 2 Tv Channels - DoorDarshan (government owned TV) and ZeeTV - which was
introduced post 1991 when Government finally opened up allowed private TV
channels.

We had one government-owned airlines: Air India - that's it. It is still owned
by Indian Government - they were recently trying to sell it but no one
purchased it as its so badly run. It also doesn't innovate because it doesn't
need profit to survive - government will keep funding it. Indian airports were
dumps compared to today where they are finally international standards. Indian
train system still doesn't allow private railroads, and yes, there's a reason
why bullet trains never made it there.

In order to get a traditional "wired" phone line, we had to wait for years.
You filled out a form to get a phone line and years later they would call you
and say... hey, you finally have it. Cell phone leap-frogged wired phone lines
in India due to capitalism - basic communication wouldn't be there if it was
still socialist Raj.

You almost could not start a business in India as an entrepreneur to the scale
that companies like PayTM, OYO, Ola Cab, Flipkart thrived. There were just too
many laws that essentially disallowed any kind of competition to existing
industries.

\--------------- Protectionism == no innovation. \---------------

As Winston Churchill said:

"The inherent vice of capitalism is the unequal sharing of blessings; the
inherent virtue of socialism is the equal sharing of miseries."

Neither systems are perfect. It's really akin to picking your own poison.

For me, personally, after growing up in socialist India, I love America, the
freedom, opportunities, an opportunities it provides.

And, here's the zinger... Thumbs-up would have thrived on its own had they
just competed. It has the same taste advantage that Coca-Cola has in US
market. Indians had been drinking Thumbs-up for years. It tastes different,
and we liked it. We were used to it - after the novelty factor of Coca Cola,
people just went back to Thumbs-up. It still thrives...

~~~
groestl
> It's really akin to picking your own poison.

As we are sharing wisdom in quotes, I have one as well: "All things are
poison, and nothing is without poison, the dosage alone makes it so a thing is
not a poison."

So if you agree with Paracelsus here (and a lot of European countries do),
picking the right bits and pieces from both capitalism and socialism might be
the winning strategy.

~~~
mehuln
I wholeheartedly agree! Neither in extreme is good... picking best of both is
probably the best way to move forward.

------
thaveedu
Lucky for India , Soviet Union collapsed at the right time if not socialism
would be still the norm and 1/6th of the world population would be still in
abject poverty

~~~
lioeters
"Almost half the world — over three billion people — live on less than $2.50 a
day. At least 80% of humanity lives on less than $10 a day." (According to a
report from the World Bank, 2008)

------
mtgx
> _The Foreign Exchange Regulation Act of 1973 required many multinationals to
> hand over 60% of the equity in their local subsidiaries to Indian partners.
> Coca-Cola would have had to release its top-secret syrup recipe and IBM its
> computer codes in order to comply. Faced with an ultimatum from Fernandes,
> Coca-Cola—along with Mobil, Kodak, and 54 other companies—left._

How interesting. Meanwhile, when China asks the same of foreign companies
today, the foreign companies seem to offer half of the local subsidy and the
entire IP on a silver platter.

Just one recent example, but there are others involving Microsoft with Skype,
Windows 10, and so on:

[https://www.theregister.co.uk/2018/12/10/qualcomm_layoffs/](https://www.theregister.co.uk/2018/12/10/qualcomm_layoffs/)

~~~
seanmcdirmid
China required 51-49 joint ventures; also this happened mostly in the 90s when
the oppurtunities in China were more apparent.

India is still a harder place to do business than China. In particular, their
law on patent ownership is really harsh such that foreign companies will avoid
filing for patents at all from India (if something needs to be patented, the
filing employee has to transfer out of India first).

~~~
mritun
What is the basis of your comment that for filing patents companies have to
move their employees?

Multitude of my coworkers in India who have filed and have been granted
hundreds of patents would vehemently disagree with you!

~~~
seanmcdirmid
I worked for a company (Microsoft) that did R&D in India as well as China.
When we (coming from China) visited India, some of the employees there
casually explained to me the problem with patents. The gist of it was that if
Microsoft filed for a patent in India and that patent was used in say Windows,
then India would demand that all Windows profits be booked in India,
regardless of the rest of the IP used in it.

------
temp1928384
Let's be real...local or not soda is objectively terrible for you.

~~~
droobles
I quit soda this year, and it's been very difficult. Sometimes I just want to
wash down a great meal with a tall, ice cold Coke. Hoping after being away
from it long term I start to not want it anymore.

~~~
wffurr
Add a splash of juice to plain seltzer. It gives you that nice fizzy feeling
perfect for washing down food, but with a fraction of the sugar of a coke.

~~~
droobles
Thank you for that tip, I'll have to try it!

------
sandworm101
I visited India many moons ago. The local coke replacement then was "Thumbs
Up".

Fyi if you are traveling in the developing world, Coke is your friend. They
have a stringent water purification regime in order that their flavor remains
consistent.

~~~
hombre_fatal
The same couldn't be said for big mineral water brands including the ones they
own? Staying hydrated with Coke sounds awful.

~~~
andybak
> Staying hydrated with Coke sounds awful

I've been told by a doctor that (flat) Coke isn't a terrible stopgap
replacement for rehydration sachets if you can't get hold of them when
travelling and ill.

Makes sense to a certain degree. Rehydration drinks are water, sugar and
sodium.

The caffeine is a diuretic but that only slightly reduces the hydration
effects compared to water - it doesn't cause a net deficit.

EDIT - Aaaaaaand no: [https://www.webmd.com/children/news/20080527/flat-soda-
doesn...](https://www.webmd.com/children/news/20080527/flat-soda-doesnt-help-
dehydration)

"They found carbonated soft drinks contained too much sugar and not enough
sodium and potassium to be an effective treatment for mild dehydration in
children."

~~~
Fnoord
I've been told Gatorade is good for that purpose.

~~~
BigChiefSmokem
I ended up in the hospital on IV because I did not know athletes were supposed
to drink pedialyte.

Some people lose their sense of thirst when pushing it.

