
When India kicked out Coca-Cola, local sodas thrived (2019) - ycombonator
https://www.atlasobscura.com/articles/what-is-thums-up
======
newyankee
When India liberalized in 1991 and welcomed foreign investment again rick Coke
simply bought out a lot of local competitors. Even today my favorite local
soda 'thums up' is marketed as a separate drink by Coke in India.

A water scarce country like India should really not promote high consumption
of soda and sugar based drinks. However the same cannot be said about other
industries.

Pre liberalization India used to be a country of license permit raj. Handful
of local companies were highly inefficient and did not produce quality
products or have incentive to improve and innovate. Liberalization did
introduce competition and a lot of international products like Honda
motorcycles and scooters. Indian 2 wheeler manufacturers like Bajaj had to
innovate to compete and did become succesful.

However a lot of sectors today are facing the problem from cheap Chinese
products. Even though we are a much poorer country a lot of local products
could not compete with Chinese imports. A classic example is furniture. Wood
was always expensive here and it was crafted into something useful by local
carpenters and artisans for what i would consider were reasonable prices.
However a lot of urban furniture is now imported from China.

~~~
saagarjha
> A water scarce country like India should really not promote high consumption
> of soda and sugar based drinks.

I mean, I can see not promoting sugary drinks in general…but what does this
have to do with water scarcity?

~~~
nkurz
I'm dubious about the numbers as well, but this article tries to do a full
calculation of water usage for a .5L bottle of Coca Cola produced in the
Netherlands: [https://www.waterfootprint.org/media/downloads/CocaCola-
TNC-...](https://www.waterfootprint.org/media/downloads/CocaCola-
TNC-2010-ProductWaterFootprintAssessments.pdf)

It concludes that each .5L bottle requires 35L of water as input. The majority
of this is from the water required to grow sugar beets, which comes primarily
from natural rainfall. Obviously, India is not the Netherlands, but I'd guess
the same principle applies: growing the sweetener takes a lot of water, and
theoretically there could be better uses for this water.

~~~
slim
coke gets delivered around the world in barrels concentrated. only water is
added in factories.

~~~
johannes1234321
This is a nice legend about the secret recipe. However production differs
oflver the world. I.e. I'm the US the sweetener is high fructose corn syrup,
while Europe uses Sycrose.

~~~
082349872349872
It's possible to find sugar-sweetened in the US:
[https://news.ycombinator.com/item?id=23363053](https://news.ycombinator.com/item?id=23363053)
I've never tried to get HFCS here, but doubt it'd be easy.

(anyone know specifically why the sweetener differs? I'm guessing either cost
or legislation...)

~~~
RichardCA
Different theories, but there's a strong belief that Archer Daniels Midland
lobbied intensively to create the current status quo in the US.

[http://www.motherlindas.com/HFCS_murky.htm](http://www.motherlindas.com/HFCS_murky.htm)

[https://grist.org/article/adm-high-fructose-corn-syrup-
and-e...](https://grist.org/article/adm-high-fructose-corn-syrup-and-ethanol)

[https://youtu.be/gPbh6Ru7VVM](https://youtu.be/gPbh6Ru7VVM) (skip to 5:30)

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Mekantis
People like to pretend that protectionism is such a bad thing. But Western
nations built themselves through protectionism, it's something China has been
doing to great success and the Asian tiger economies (primarily South Korea)
did as well. After all, there's only so much you can do for your population if
you never ensure a steady supply of high quality jobs that provide a path into
the middle class, and you don't protect fledgling industries (beyond basic
commodities) that are necessary to create these jobs but can't compete
properly against well-established companies elsewhere. It's one of the great
neoliberal myths that they've so successfully perpetuated (primarily through
institutions like the IMF and the World Bank) that free trade and vicious,
expansive privatization is the only right path.

~~~
missedthecue
_" People like to pretend that protectionism is such a bad thing"_

David Ricardo mathematically proved it was a bad thing over 200 years ago. It
absolutely befuddles me that people, especially in scientific communities,
continue to support its implementation. Hong Kong has always been free trade
and their GNP per capita is now greater than all of western europe, barring
Norway (which is equal to HK). Protectionism makes yourself poorer.

Isn't interesting concerning tariffs that what we do to our enemies during
wartime we do to ourselves during peacetime.

~~~
kevin_thibedeau
> their GNP per capita is now greater than all of western europe

What if Shenzhen didn't exist across the river? HK is part of a unique
economic environment with significant externalities making it prosperous.

~~~
newyankee
Approaches that make small countries like Singapore, Taiwan or Hongkong
succesful are not easily scaled to a large one like India. Using them as
examples in arguments is very disingenuous.

~~~
missedthecue
Just because India has 1 billion people does not mean that they would be
better off buying inferior goods at higher prices.

Hong Kong is equal or larger than Austria, Switzerland, Denmark, Finland, and
Ireland.

Taiwan is larger than all those, plus the Netherlands, Portugal, Belgium, and
many others.

They are richer because of their adoption of free trade.

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sandworm101
Longtime traveler here. I was in india in the early nineties to witness thumbs
up. Coke is a big bad corporation and that makes them evil, but when I
traveled I always drink coke. Coke has always been obsessed with keeping its
flavor consistent across markets. To get there they have to start with
consistent water. That means their water is filtered and treated properly
before it is turned into coke. So, when I am traveling, if I ever have a
choice between coke and a local product I will go with coke. It is not the
most enlightened decision but, having had a couple water-borne diseases in my
day, coke is the safe bet.

(Conversely, New England has a variety of local "sodas". I do not hesitate to
try those when I am in that area. New England is not India.)

~~~
sumanthvepa
If your health is the reason is why you are drinking Coke, I have some bad
news for you. Coke is produced by local bottlers, franchisees, who produce it
under license. The production standards for Coke vary across the world, and
the health codes each bottler follows usually confirm to local law, which
varies. The Coke process is simple enough that you get the same taste, but you
won't get the same health standard. And even more ironically those local
products you talk about are actually owned by Coke, and all those brands are
made in the same factory. Yes, drinking out out a bottle is safer than
drinking tap water in India, but do your health a favor and just buy yourself
a bottle of branded water -- Aquafina is the Coke brand here. You'll be fine.

~~~
sandworm101
When "coke" read "coke products". And there were far fewer of those when I was
last in Bombay. Those local bottlers are inspected by coke... which is better
than being inspected by nobody. I'll take industrial standards of health over
local/nonexistant standards.

------
rayiner
> “When I chucked out Coca-Cola in 1977, I made the point that 90 percent of
> India’s villages did not have safe drinking water, whereas Coke had reached
> every village,” the late Fernandes said in a 1992 New York Times article,
> adding “Do we really need Coke? Do we need Pepsi?”

Between 1977, when India kicked Coke out the country, to 1993, 16 years, when
Coke reentered the Indian market, India's GDP per capita (adjusted for
inflation) increased 65%. During the next 16 years, from 1993 to 2009, GDP per
capita increased increased 267% (multiplying by 3.6x). In the next 11 years,
GDP per capita doubled again.

Had India not engaged in a multi-decade dalliance with central planning and
pursued economic liberalization off the bat, India's per-capita GDP would be
twice as high today.

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pkilgore
I've stopped reading stories like these through a lens of globalism or
protectionism, but instead from the perspective of concentration of market
power and competition.

It seems to me more and more that the mere existence of a Goliath in a
marketplace causes far fewer David's to even attempt competition, whereas
their breakup or de-integration can cause new markets to flourish (and
eventually new Goliaths to arise).

The part of the story that seems to be missing above that you would normally
see in the USA is that the upstarts in India here were not purchased /
tookover / or otherwise integrated by the larger entity.

I wonder why this didn't happen? Is there something about India's corporate
law or antitrust?

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intended
I was there during the liberalization. What a time to have witnessed. I
remember the headline when coke bought Parle, for what was then an eye
watering number.

And then several years later, TATA motors bought JLR. Of the two purchases,
Coke definitely seems to have gotten the better of it.

It’s quite impressive what was managed in 1991, and the deep impact it’s left
on the country.

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elSidCampeador
Protectionism by itself may not be a very bad thing - it was the top-down
planning mechanism tacked on top of the protectionism that did India in. Every
bloody aspect of industry was regulated by the government, which was
counterproductive.

For example, Bajaj scooters could only manufacture a fixed number of scooters,
and that number was decided by a bureaucrat with no idea of how much demand
there was. The waiting list for these scooters stretched to 10 years at times!
[source - interview with Chairman of Bajaj Group here
[https://www.hbs.edu/creating-emerging-
markets/Documents/tran...](https://www.hbs.edu/creating-emerging-
markets/Documents/transcripts/Bajaj_Rahul_Web%20Transcript.pdf) ]

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chrisco255
When Austin kicked out Lyft and Uber, local ride sharing thrived. However, the
problem was they paled in comparison.

~~~
amelius
I'm sure that customers still reached their destination just fine like before
ride-sharing was a thing, perhaps with only some minor inconveniences.

~~~
icebraining
Or, just like before ride-sharing was a thing, they wouldn't go at all. Lots
of teenagers / young adults I knew who lived in areas with poor public
transport got a massive upgrade to their social and cultural lives when ride-
sharing appeared. For example, they could now join a band, since they could
get home afterwards.

Some elderly people I know also started going to the doctor more often,
because walking to and from the bus stops was difficult, and the taxi was
quite expensive for their low pensions.

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cvs268
Until they allowed Coke back in and it promptly bought-out the various local
brands!

Every bottled drink brand is now either owned by the Coca-Cola Company, or by
PepsiCo Inc. :-(

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tadasZ
In my opinion Vita-Cola, Polo-Cockta, Kofola faded not because of coca cola,
but because they were controlled by soviet mentality people from "higher
status", party people and so on, who didn't care about anything but
themselves, a lot of companies disappeared after soviet union collapsed (thank
god it did collapse) because of crime, corruption and complete incompetence.

~~~
jlg23
Vita-Cola is again alive and kicking, and I am one who actually loves it. I am
sure this is not just nostalgia, because, even though I was born in the GDR, I
was 9 when the wall fell and maybe had 3 glasses of Vita Cola before.

"crime, corruption and complete incompetence" are often cited as the reasons
for why local brands disappeared, along with "nostalgia" for their revival. I
personally believe people just wanted to have the stuff they could not get
before - or "curiosity" to put it in one word. Once that was over, people went
by taste again and yes, there are actually customers who just like a higher
acidity, less sugar or simply a different taste.

~~~
RealityVoid
I think curiosity doesn't really cover it. Being a kid in the 90's, home-grown
soda sucked. In Romania, we had knock-offs such a Adria Cola witch were, quite
honestly, horrible.

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madmax108
Travelling the world, one of the things that always strikes me is how
omnipresent Coke and Pepsi are. But at the same time, every part of the world
has it's own local twist on sugary sodas. The duopoly is so nice: You want
something familiar, you always have it. You want something that cements a
place in your mind, you have that too manufactured by the same conglomerates!

A sip of Thums up takes me back to my college days (in India), just like
Fresca teleports me to Costa Rica, The orangey goodnesss of Kas takes me to
the coast of Malaga in Spain, and I can't even think of Mexico without tasting
the many flavours of Jarritos available there!

~~~
twic
I need to go back to Malta to drink some Kinnie!

~~~
BMorearty
Haha, I never expected to see Kinnie on HN.

My wife's parents are American immigrants from Malta. I tried Kinnie when we
visited Malta. Not personally a fan. I think it's an acquired taste.

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satya71
There are basically two ways a company can gain market share: make better
product or spend a lot capital. Opening up the economy allows both kinds of
competition, and local companies in a developing cannot do the second.

Cold drinks are a sector where capital is the only way to gain market share.
No wonder Coca Cola could outspend its local rivals and capture market share.

Sectors where innovation and understanding of local market matters, local
competitors can emerge and do better. Vehicles are one such market where
developed country behemoths have had limited success. Dinosaurs like Hindustan
Motors couldn't compete, but Maruti Suzuki (now Suzuki) and Hyundai maintain
comfortable leads in market share.

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virtuabhi
Limca and Thums Up are also available in Indian stores around the world.

~~~
cvs268
Both are owned by the Coca Cola company now.

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dang
Discussed last year:
[https://news.ycombinator.com/item?id=19192335](https://news.ycombinator.com/item?id=19192335)

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intended
Interesting note on thumbs up - it still exists - Coke’s attempt to phase it
out resulted in consumer backlash, since there is still a large demand for it.

So they did the logical business thing and sold both.

(Although thums up may be smaller than it used and could just be dying a
slower death.)

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shakencrew
previous discussion:
[https://news.ycombinator.com/item?id=19192335](https://news.ycombinator.com/item?id=19192335)

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ncrmro
When I went to PyCon India 2017 i travled a bit and it was cool to see the
regular name brand soda used sugar.

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missedthecue
When [country] enacted protectionist polices, [protected industry] thrived!

~~~
paxys
Look up the limitless number of examples of government overregulation and
failed policies for the past hundreds of years in every country in the world
and you'll see why it isn't that obvious.

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markdown
Maaza ftw!

