Coca-Cola's bottling plant meets roadblock

The Gulbarga bench of Karnataka High Court stays land acquisition process

The proposed expansion of bottling capacity in Karnataka by Hindustan Coca-Cola Beverages Pvt Ltd (HCCBPL), bottling partner of the Coca-Cola Company in India, is likely to be delayed. The Gulbarga circuit bench of the Bangalore High Court has stayed the process of land acquisition for the new plant in Yadgir district.

The court, on July 25, stayed disbursal of compensation to the affected farmers after a group of the latter petitioned for more of it, government sources said.

HCCBPL had proposed to set up India’s largest bottling plant for Coca- Cola in four phases over 250 acres at Kadechur and Badiyal villages in Yadgir district, one of the most backward areas in the state. The first phase involves an investment of Rs 250 crore. The company has already paid a little over Rs 20 crore to the Karnataka Industrial Area Development Board for land acquisition.

HCCBPL had signed a memorandum of understanding with the Karnataka government during the Global Investors Meet (GIM) in June 2010. It had asked for 250 acres and KIADB is currently acquiring the land.     

KIADB had issued a final notification for acquiring 3,232 acres at Kadechur and Badiyal villages on December 30, 2011. The state government has proposed to develop a pharmaceutical cluster, food park and textile park in these villages. KIADB had fixed Rs 6 lakh an acre as compensation. However, some farmers are demanding a little over Rs 9 lakh an acre, sources said.

M Maheshwar Rao, commissioner of the department of industries and commerce, government of Karnataka, said: “The high court has stayed the process of payment of compensation to farmers. The government will defend the case in the court and get the stay vacated.”

HCCBPL is the largest bottling partner of the Coca-Cola Company in India. It is responsible for the manufacture, package, sale and distribution of beverages under the trademarks of the Coca-Cola Company, says its website. It currently operates two bottling plants, at Bidadi near this city and Hospet in Bellary district.

“Coca-Cola India (CCI) has 14 bottling partners in India. We only supply concentrate to our partners, who in turn manufacture beverages and market these in the country. We are not directly concerned with the setting up of bottling plants and we do not have any direct investment in the bottling plants,” said a company spokesperson.

HCCBPL, a part of the Bottling Investments Group of the Coca-Cola Company, has 24 bottling plants at various locations across India. It covers approximately 65 per cent of bottling operations for the Coca-Cola system in India. HCCBPL’s distribution system spans a little over a million outlets.

According to government sources, HCCBPL has proposed to set up multiple bottling lines, an on-site 100-acre water reservoir and a zero water discharge facility. The plant will be designed to produce all types of aerated soft drinks, juices and packaged water. In the first phase, it plans to install two lines and a further three to four lines in the second phase, within six years from the date of land allotment. Once fully developed, the plant is expected to generate direct and indirect employment for 20,000 persons.