Unrest by workers has stalled production at three Coca-Cola plants in north India, including one of the country’s largest, in the wake of the company’s decision to divest operations of its bottling subsidiary Hindustan Coca-Cola Beverages Pvt. Ltd (HCCB) to existing bottlers, three people with direct knowledge of the matter said.
Production has been disrupted at Dasna and Varanasi in Uttar Pradesh, as well as a plant in Jammu.
On 4 December, HCCB announced it would sell its bottling operations in four territories in north India to its existing bottlers—Kandhari Beverages, Moon Beverages, and Ladhani Group (SLMG Beverages)—as part of efforts to streamline business and create regional scale in north India.
Coca-Cola works with local bottling partners in India apart from owning plants through HCCB.
“Obviously, the workers are not happy at being transferred from a multinational company," said one of the three people mentioned above who did not want to be identified.
“Moon Beverages has not yet been able to take possession of the (Dasna) plant. They hope to," the person said. Bottlers hope that a deal will soon be struck between the striking workers and HBCC, the person said.
There are 500-600 workers in the three plants, according to the person cited above.
Of these, 359 workers besides other staff are at the Dasna plant alone, one of the largest.
However, workers at the plant are still negotiating terms with HCCB before moving to work for a new employer.
“The management (HCCB) had agreed that post 9 December all operations will be handled by Moon Beverages as the business has been realigned," said the person cited above.
“However, we are still negotiating with the management of HCCB and then we will see how things turn out," he said, adding that workers are seeking written assurances.
At that time, HCCB said it will continue to operate in east, west and south India.
The completion of the transaction in the case of SLMG Beverages was expected to happen by 10 December, according to a transfer letter provided by HCCB to employees of its plant in Varanasi.
This is yet to happen.
Coca-Cola India did not respond to Mint’s emailed queries on the matter. Another person familiar with the plans of the company and the bottlers said that the “transition of such scale takes time and as it is a lean season for the beverage business in north of India, the plants are also undergoing regular maintenance".
In all, Coca-Cola works with 14 bottlers in India and has more than 55 manufacturing units in the country from where it bottles popular beverages such as Coke, Thums-Up, Sprite, Fanta, and Minute Maid.
Workers are worried about job security and uncertainty over the transition to the new management, the person said.