Coca-Cola is a reputed multinational company. But is it slipping up on quality control?
In 2006, a city consumer court had ordered Coca-Cola India to pay a fine of more than Rs1 lakh after a man found dead insects in a bottle of one its brands, Sprite. Three years later, this correspondent faced a similar problem.
This afternoon, I drank a 200-ml bottle of Coca-Cola. While drinking from the bottle, I gulped down something else along with the liquid. On further examination, (see picture) I found something at the bottom of the bottle which looked like a few insects.
I called up the Coke office at Gurgaon with the batch number and date & time of filling of the bottle. Viraj Chouhan, general manager, (Public Affairs and Communications), Coca-Cola India, said, “I really don’t know if this (bottle) was tampered with. We need to investigate this incident. Our consumer grievance guys are the best (people to be contacted).” Mr Chouhan gave me an email ID ([email protected]). I immediately shot off an email to this ID.
However, I have not received a response so far. Even after repeated attempts, Coke’s toll-free number (1800-182653) was not reachable even though this number was given to me by the assistant of Coca-Cola’s vice president (Corporate Affairs), Deepak Jolly.
I have sent a complaint to the Consumer Redressal Forum.
The reason why Moneylife is highlighting this case is to reveal how shoddy is the level of customer service of Coke in India, despite this country being a major market for this cola manufacturer. I am sure if I had faced a similar ordeal in the US with a Coke bottle, there would have been a major hue and cry and the company might even have been slapped with a lawsuit for hefty damages.
Over the years, cola companies have repeatedly been accused of shoddy bottling—finding insects or other material in bottles is not a rare occurrence. Often, their communications personnel hint at spurious products being sold by retailers, but seem to do little to stop the practice. Sources however say that cola companies have little control over the hygiene and procedures of their regular bottlers. Even in this case, we find the attitude of the soft-drink manufacturer fairly laid-back and unsurprised at our complaint.
Advocate Vijay Srivastava, who works for a non-profit organisation for consumer redressal, tells us that multinationals like these would normally face charges for such incidents under unfair trade practices and deficiency in services.
Markets are likely to remain under pressure for the rest of the week
The market ended the day with a gain after trading in a narrow range. The BSE Sensex ended the day with a gain of 29 points (0.16%) at 17,970 and the Nifty ended the day 8.6 points higher (0.16%) at 5,374 points.
The market started the day with an early gain and gradually reached the intra-day high at mid-day trading. It pared gains as bank stocks slid on the concerns of a possible rate rise by the RBI in its next policy meeting. The psychological 18,000 mark was crossed today after which the market went south. In late afternoon trade, it rebounded from the low and ended the day with a gain.
Asian stocks rose as investors expected the US Federal Reserve to keep benchmark interest rates at a record low. The key benchmark indices in Hong Kong, Japan, Indonesia, Taiwan, South Korea and Singapore rose by 0.03% to 1.82%. However, China's Shanghai Composite index slipped 0.33%. The Bank of Japan has decided to keep interest rates unchanged as the economy is trying to inch back to stability.
The World Bank’s buoyant sentiment about the East Asian economy was reflected in its forecast for the economic growth for the region. In a semi-annual economic update, the Bank said that East Asia will grow by 8.7% in 2010. This is an upward revision from the 7.8% growth it had estimated in November last year.
US stocks were on the rise with bank stocks supporting the gain as the Fed meeting eased the concern on interest rates. The Dow Jones Industrial Average shed 3.56 points (0.03%), to 10,969.99. The S&P 500 gained 2 points (0.17%) to 1,189.44 and the Nasdaq rose 7.28 points (0.30%) to 2,436.81.
Closer home, rating agency CRISIL said that more Indian companies will be upgraded rather than downgraded in FY 2010-11. However, CRISIL said key risks that could affect credit quality include a global credit event on sovereign debt, impact of inflationary expectations on interest rates, and exchange rate volatility. The service industry grew at a slower rate in March after it touched a 17-month high in February. The HSBC Markit Business Activity Index, based on a survey of 400 firms, fell to 58.1 in March from 60.9 in February, which was its highest level since September 2008.
Foreign institutional buyers were net buyers on Tuesday of Rs261 crore, domestic institutional investors bought stocks worth Rs81 crore. The rupee was weaker today.
Godrej Consumer Products (up 1.3%) has acquired the Indonesian insecticides and personal care products company PT Megasari Makmur Group and its distribution company. Reliance Industries (up 0.7%) has said that it is currently producing 63-64 million standard cubic metres a day (mmscmd) of gas from the D6 block off India's east coast which is below the peak production capacity of 80 mmscmd.
GlaxoSmithKline Consumer Healthcare (up 0.46%) will invest Rs270 crore for the next three years in its Indian operations for capacity expansion. With a focus on the southern market, Electrotherm India (up 1.7%) plans to raise Rs80 crore from this region in the next two years. Reliance Power (down 0.6%) is likely to start selling power as soon as the commercial operation of the first unit of the Rosa Power Project in Uttar Pradesh starts. The second unit of the plant is expected to start in May 2010. NTPC (up 0.8%) plans to borrow Rs20,000 crore in FY11. Essar Oil plans to lay a 160-km pipeline from Durgapur to Kolkata to transport gas from its CBM blocks to consumers in West Bengal. Essar Oil (up 1.5%) has applied to the sectoral regulator, Petroleum and Natural Gas Regulatory Board (PNGRB) for permission to lay a pipeline from Durgapur, according to the company’s 13 January 2010 application to the regulator. The company is likely to start producing gas found below coal seams.
The enabling legislation for PFRDA has failed to see the light of day due to quiet resistance from the Left to the mechanics of the NPS. Meanwhile, the PFRDA continues to walk barefoot without an umbrella Act
The Pension Fund Regulatory and Development Authority (PFRDA) Bill 2009 has become the bone of contention among political bigwigs from West Bengal, which has apparently put the legislation into deep cold storage, at least until the West Bengal Assembly elections.
The pension sector regulator PFRDA’s New Pension Scheme (NPS) has attracted opposition by Left Front leaders who are understood to be dead against the equity investment option given to investors in the NPS (wherein 50% of the funds would be invested in equities), say highly placed sources close to the development.
The Left has traditionally taken a hard stand against the State’s money flowing into the capital market. Our sources tell us that the inexplicable and complete silence over passing the PFRDA Bill is on account of opposition by railway minister, Mamata Banerjee of the Trinamool Congress. With West Bengal’s Assembly elections round the corner, the Trinamool Congress hopes to create history by ending decades of CPI(M) rule. At this stage, Ms Banerjee, an important ally of the Congress, probably wants to ensure that the Left doesn’t create an issue out of the investment pattern under the New Pension Scheme.
“There is no other reason why there is no attempt to have the Bill passed, even when the finance minister’s Budget speech announced that the government would credit Rs1,000 into each new NPS account that is opened,” said a source, requesting anonymity.
Highly-placed sources in the government believe that this political imbroglio is the main reason why the PFRDA Bill has not received the requisite priority. For a long time now, the pension sector in India has been wading through untested waters on what are essentially flimsy support structures. In the absence of a sound, robust legal framework for regulation, the PFRDA has been working barefoot to develop the new pension system.
Although there exist several enactments that seek to safeguard the interests and rights of senior citizens with regard to pension, these are minor, scattered and unrelated Acts and Rules that do not provide a comprehensive legal framework for the functioning of this sector.
These include, among others, the Pensions Act, 1871, the Central Civil Services (Pension) Rules, 1972, Central Civil Services (Commutation of Pension) Rules, 1981, Payment of Arrears of Pension (Nomination) Rules, 1962.
The PFRDA was established amid much fanfare by the government in 2003. The PFRDA Bill, 2005, which was to be an enabling legislation that defined its powers and duties, failed to receive the approval of Parliament. Through an executive order, the government mandated PFRDA to act as the regulator for the pension sector in the interim. With the end of the 14th Lok Sabha on February 26, 2009, the Bill lapsed. The Bill was reintroduced in 2009, but has been attracting cobwebs as it has been blocked by political hurdles. Strictly speaking, this means that if there is a regulatory action needed, the PFRDA has no statutory authority or power at its disposal to initiate action.
The capital markets regulator, Securities and Exchange Board of India (SEBI) faced a similar dilemma when it first became operational. SEBI was formed by the government in 1988, but received legal mandate only four years after, with the passing of the SEBI Act, 1992. Until that time, it had no legal backing to allow it to manoeuvre through the mess that characterised the capital markets until then.
Although the interim PFRDA has taken some commendable steps in initiating and implementing the New Pension Scheme (NPS) architecture, there exist numerous gaps in the administration and functioning of this scheme that need to be addressed immediately. The lukewarm response to the voluntary NPS so far demands thorough scrutiny on part of the regulator.
Pension sector reforms in India have historically taken a backseat to other reform initiatives, leaving the sector in a state of inertia. The deficiencies in the current pension system in terms of low coverage, underdeveloped private pension market, underperformance of various pension and provident fund schemes, investment restrictions etc are only holding back the development of the economy as a whole.
With the number of persons aged 60 and above expected to grow from 100 million in 2010 to 330 million by 2050, pension reforms need to be taken up on a priority basis.
The first step in this process would be to establish an umbrella Act to support the industry regulator. Sadly, the powers-that-be have other things on their agenda.