It seemed faintly absurd to us in Atlanta or elsewhere in the world that Coke should have become an object of political controversy at all. Sure, there were always people on the hysterical left, whether in Latin America or in India, who would scream that Coca-Cola was a CIA plot, but the attacks on Coke in India were particularly bizarre. People would stand up in Parliament and accuse us of “looting the country” and “destroying the health of Indians.” One firebrand socialist, George Fernandes, demanded to know, “What kind of a country is India, where you can get Coke in the cities but not clean drinking water in the villages?” Another of his comrades stood up and asked in Parliament, “Why do we need Coca-Cola?” I remember, just before I came out to India, meeting the chairman of the company, Paul Austin, and hearing him marvel that, in a country with so many pressing problems, Indian members of Parliament actually had the time to devote to attacking Coca-Cola! But it didn’t faze us. We’d been through worse as a company in France in 1949—50, when attempts to ban Coke nearly led to a trade war. We could handle our share of lefty nationalist hysteria.
Amidst all of this, Mrs. Gandhi ended her state of emergency and called an election. I guess you’ve done your homework on those days, but it was an incredible time, Randy. She had been a dictator, for all practical purposes, for the twenty-two months she’d ruled under emergency decrees, and here she was, allowing the victims of her dictatorship the right to decide whether she could continue her tyranny! India’s an astonishing place, and this was India at its most astonishing. We’d barely unpacked when the election campaign began, and it was as if we’d pitched our tents in a hurricane. Before I had even drawn up my marketing strategy and got moving toward the first phase of my two-hundred-million-cases target, Mrs. Gandhi had been defeated in the elections and a new coalition government, the Janata government, took office. And guess who was named Minister for Industry in the new cabinet? Coke’s favorite Indian politician, the socialist George Fernandes. Minister against Industry might have been a better title for him.
Kisan Mehta had already urged me not to be too ambitious. Our sales curves in India showed a growth rate comparable to Coke in Japan, he said. This is not the time to rock the boat by trying to double our speed when we should be happy that we’re sailing at all. But I didn’t listen to him. I thought I knew better.
Now, you’ve got to understand that Coca-Cola India was actually a wholly owned company, wholly owned by Coca-Cola in the U.S., and what we did was to manufacture and supply Coke concentrates, plus provide the marketing and technical support to our franchisees. The bottlers were all Indian-owned companies that bought the concentrates from us. This way we kept control of the product and of our secret formula, 7X, but we didn’t need to employ more than a hundred people in India ourselves. The downside of this was that we were very definitely a foreign company in India.
Well, Mr. Fernandes lost no time in going after foreign companies. IBM and Coke became his first victims. He demanded that we indigenize our operations and that Coke, specifically, should release our secret formula to the authorities as the price of doing business in India. We refused. Paul Austin said at the time, “If India wants Coke, they’ll have to have it on our terms.” Well, India — at least as represented by this Indian government — didn’t want Coke on our terms. In August 1977, eight months after I’d gotten to India, our long-pending application under Section 29 of FERA was rejected by the government. Coke was ordered to wind up in India.
It was a helluva blow, I’ll tell you that, Randy. Not just professionally, though that was bad enough. We spent two million dollars grinding up every Coca-Cola bottle in India, and all we got in return was publicity for the sanctity of our secret formula. Big deal. I’d uprooted my family and dragged them halfway across the world and now it seemed the whole reason for doing so had disappeared. It didn’t make sense, when they’d just settled down to life and school in India, to uproot them again and drag them back, and frankly it’s not as if Coke had something better to offer me back in Atlanta either. Plus there was the question of professional pride. Coke was keeping on a skeleton staff to handle all the liquidation work, including an interminable excise tax case going back decades, so I asked to stay on with them. I felt that if there was a creative way back for Coke in India, I was the man to find it. I wanted desperately to be able to vindicate, one day, my original decision to come to India.
So we stayed on. My eldest son, Kim, was in his last years of high school, and the company agreed I should stay until he’d finished, trying to get Coke back into business here. Katharine had found a job teaching at the American International School. The pay was terrible, but at least it meant she had something to do besides resenting India and me. Lance, the youngest, was just a kid, a bit slow, what they’re now beginning to call learning-disabled, and he was happy enough wherever he was. It was Priscilla that India had the greatest impact on. She was twelve when we arrived, just awakening, I suppose, to adolescence and emotional maturity, and it all happened here. I never thought of her in making my decisions, whether to come or to stay, and now I know it was her I should have thought of the most.
Yes, thanks, I’ll have another. Didn’t have the time to think about getting this stuff. Glad you did. Nah, don’t worry about soda. I like the stuff neat. Doesn’t do anything to me, really. Except makes me talk.
The professional challenge soon turned out to be a hopeless one. I may as well admit it, though at the time I kept trying to persuade myself and Atlanta that I was on the verge of a breakthrough. With shrewd advice from that old veteran Kisan Mehta, I came up with one clever scheme after another, but nothing worked. I tried to work with the Indian bottlers, who were initially the hardest hit by the government’s decision, to generate a change of attitude, pointing out that it was Indians, not just an American company, who’d been hurt by the expulsion of Coke. No dice. And the bottlers figured out soon enough that they could do just as well manufacturing Indian substitutes for Coke, free of the threat of international competition, so that argument lost its force as Thums Up and Campa-Cola were born and thrived in the vacuum we’d left behind. In fact George Fernandes even got the government into the soft drink business, converting a dozen Coke bottling plants to the service of a product called 77. Or maybe it was Spirit of 77. Anyway, it was a rather feeble spirit, and it disappeared pretty quickly from the market. But with all this stuff coming out, I needed another approach to try and bring Coke back into business.
One idea that occurred to me was to take a leaf out of the Pepsi strategy in the Soviet Union. You remember how Pepsi had slipped behind the Iron Curtain while we were still blacklisted there? Their trick was to offer a real quid pro quo — marketing a Soviet product, in their case vodka, in America in exchange for being allowed to market their product, Pepsi, in the USSR. It worked for Pepsi in Moscow, but not for Coke in Delhi. I suggested that we could use Coca-Cola’s expertise to set up a chain of stores in the U.S. selling Indian handicrafts, bringing major export revenues to India, in exchange for resuming our sales of Coke in India. The Indian bureaucracy considered it for about three months, then nixed that too.
I kept on trying, Randy. That was the story of my three years in India — trying to get Coke back to a firm foothold in this market, in the face of impossible odds. How ironic it felt, during this time, to be attacked as a tool of Western imperialism! The old imperialists just marched in and took over, or took what they wanted, or both. Here we were desperately trying to court the Indian authorities, inventing new ways to please them, asking to be allowed to bring them the pleasure that our product could provide. This is imperialism?