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Coca-Cola franchise bottler shuts down Varanasi plant

Post Time:Nov 22,2021Classify:Industry NewsView:1009

SLMG Beverages says business hit due to shift from glass to PET bottles

SLMG Beverages, the franchise bottling partner of Coca-Cola India, has shut down its Varanasi (Mehdiganj) plant, attributing the decision to the beverage industry’s broader transition to PET from glass bottles.

The company had acquired this plant about two years ago from Coca-Cola’s bottling arm, Hindustan Coca-Cola Beverages (HCCB).

According to the notice sent to plant workers, a copy of which is with BusinessLine, SLMG Beverages said the contribution of the glass bottle-packaged beverage segment to its business has become almost nil due to the shift to PET bottles. It added that despite the evolving circumstances, the company’s management made full efforts to keep the plant operational. However, due to financial losses, it had to take the “difficult” decision to shut down the plant located at Raja Talab, Varanasi on November 12, the notice said.

SLMG Beverages did not respond to queries in this regard. Per the notice, the final payment of “statutory dues” to workers included salary up to November 17, one month salary (basic +DA) and annual bonus till November on pro-rata basis.

Workers’ protests

The Coca-Cola Workers Union of the plant termed the shutdown as “illegal”. In a letter to various local authorities, the union said reasons given by the management for the plant shutdown are inaccurate as manufacturing of glass-bottled soft drinks continues in other plants of SLMG Beverages and HCCB. The union said no voluntary retirement scheme was offered and the company’s management did not take permission from the labour department and other authorities before terminating the services of the workers.

Independent legal entities

Responding to e-mailed queries from BusinessLine, a spokesperson for Coca-Cola India said, “Our bottling partners are independent legal entities and align their operations with evolving market conditions and business imperatives. Any decision our bottling partners take as part of their processes are focused on enhancing efficiencies and optimising existing capacities. We have confidence in our partners to operate in compliance with local guidelines and mandates.”

The Ladhani Group-promoted SLMG Beverages operates seven manufacturing facilities in Uttar Pradesh that make Coca-Cola’s portfolio of beverages. Aerated beverages in glass bottles are typically priced at ₹10.

Source: https://www.thehindubusinessline.com/Author: shangyi

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