Ramesh Chauhan
Chairman
Bisleri International
After having sold his brands like Thums-Up and Limca to global giant Coca Cola, Chauhan declared that he would never even consider selling the brand Bisleri. Giving his view on FDI in retail, Chauhan believes it will not have any effect on the economy as opposed to general opinion that FDI will help the economy to grow fast.
Below is the edited transcript of Chauhan's exclusive interview on CNBC-TV18.
Q: The debate over FDI again is raging; this time over FDI in retail. What are your thoughts?
A: I am not too sure whether that the debate is really necessary is occupying too much space. FDI, whether it comes or not, we are supposed to be a country of traders. From there, we have moved on to industrialists and manufacturers and exporters. Now, the retail business is being done by Big Bazaar and many other companies. So, I don't know. I am completely indifferent whether they come or don't.
Q: Is it harmful, is it good? Let's take your example. You fought to keep FDI out of your sector, you couldn't keep them out, they came in, they paid you handsomely for your brands. You used that money; you have built up an entirely new business and have done very well. So, isn't there space for everybody in this country, enough for the market?
A: I am indifferent. I have not applied my mind to it. The issue which people are making which I totally disagree with that FDI will help the economy to grow fast. I said - FDI in retail is not going to have any effect, in my opinion. What is preventing presently - our industrial growth is the ineffectiveness of the government in implementing the existing laws.
Q: Are you saying if they allow interest rate movement, if they allow coal chains to be set up across the country - you don't need foreigners come and do it, Indian companies can do it?
A: I am saying not only that. I think they are talking about too many big things. If you talk about the smaller things - the irritations which millions of small entrepreneurs are facing - the license raj and the permit raj were supposed to have gone with the industrial licensing going away and the import licensing go away. But the amount of licenses and permits required to put up a simple thing like a water factory is something like 29-30. Do you require so many licenses? After all, you will still find problems. So, implementation is a bigger problem.
Q: Let's get back to your business. You sold your brands to Coca-Cola about 19 years ago. When you sold the brands, you and your wife cried at that signing ceremony. How difficult was it to sell your brand?
A: Very difficult.
Q: And you did cry?
A: Of course. It is not easy to cry.
Q: But you are still attached to the brand. Is it a matter of pride that Thums Up and Maaza are still the largest selling brands in the category or is it a matter of regret that you sold them?
A: There is no regret at all about selling. There is, of course, great pride. I feel sorry that Limca has been left behind. I think Limca can beat both 7UP and Sprite combined. Limca has got a good amount of value which has been built up over the years. It had sort of a first mover advantage.
Q: But to be fair to Coke, haven't they promoted it?
A: But you see, Thums Up, Limca and Maaza were not advertised or promoted for the first seven years. Then they woke up and started advertising Thums Up. Maaza - they started advertising something like 12-15 years later. Now, let's accept that for a consumer product like ours - advertising is the key.
Q: When you sold your brand you said some of the reasons you sold was because you didn't have the money to battle with Coke and the other was most of your bottling was other than maybe four or five you didn't own most of your bottlers?
A: Yes, four were ours and the others said that we can battle Pepsi but Pepsi and Coke combined, if you have to battle it will be very difficult.
Q: So money was an issue?
A: Not money, this was the time of liberalization so the love and glamour of everything foreign was out of proportion. That is where people were insecure whether Thums Up will be able to stand up to Coke and Pepsi. Now you can say that they have proven wrong but at that time that was a feeling and one would have to accept it.
Q: Those lessons that you learnt from there, how did you translate that into your Bisleri business?
A: Yes, because now all the major plants are owned by us. 80% of our plants are what we call a co-packer meaning contract packer where they only manufacture and give it to us. So, we can save on freight.
Q: So that's manufactured by somebody else and you brand it?
A: Not just brand it, we brand it and sell it. In the case of franchise, it's their branding and they sell it and we get the royalty. Here, the sale is in our hand.
Q: You bought the brand Bisleri in 1966. It wasn't till the mid 90s after you sold your other brands and we waited a few years till you really gave it a push. Why did you wait so long?
A: To be very honest, we bought Bisleri not as a mineral water brand.
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