India strikes hard? To force Coca-Cola to hand over its 120-year-old secret formula, it repeatedly implements unscrupulous policies.

Coca-Cola, as the dominant force in the global beverage industry, has kept its secret formula tightly under wraps since its inception in 1886, with almost no one able to pry it loose.

However, a series of actions taken by India in the 1970s shocked the world: not only did they demand that Coca-Cola hand over the secret formula it had guarded for 120 years, but they also pressured the company, attempting to force it into making concessions.

The origins of this can be traced back to Coca-Cola’s founder, John Pemberton.

Pemberton, originally a pharmacist, created Coca-Cola with the intention of addressing health issues, yet it ended up becoming the foundation for a global business empire.

At that time, India had just gained independence, and its economic policies began shifting to protect domestic industries.

Foreign companies gradually became targets, and Coca-Cola, which was actively expanding in India and seeing rising sales, faced policy intervention after entering the country.

The Indian government, through the Foreign Exchange Regulation Act (FERA), demanded that foreign companies reduce their equity stakes and hand over core technologies.

For Coca-Cola, the secret formula was undeniably its lifeblood, so the company firmly refused to divulge this business secret.

The government then escalated the pressure by introducing new regulations, eventually forcing Coca-Cola to withdraw from the Indian market.

This event attracted widespread global attention, with some voices claiming that India was protecting local businesses, while others argued that the government was overly intervening.

To understand Coca-Cola’s history, we must start by looking at the background of its founder, John Pemberton.

Pemberton was born in 1831 in Georgia, USA, and trained as a pharmacist.

He opened his own pharmacy, selling various medicines. During the Civil War, he was wounded while serving as a lieutenant colonel in the Southern Army and became reliant on painkillers.

This experience sparked his interest in medicinal formulas, and he sought a non-morphine alternative.

In the 1870s, Pemberton first experimented with a drink called “French Wine Coca,” which combined coca leaf extract and alcohol. Although it sold well initially, due to Atlanta’s prohibition, he removed the alcohol and added carbonated water, ultimately creating the drink we know today as Coca-Cola.

On May 8, 1886, Pemberton created the first batch of Coca-Cola syrup and sold it in local pharmacies, priced at five cents per glass.

Initially, Coca-Cola was marketed as a medicinal tonic for headaches and other nervous disorders. Pemberton’s assistant, Frank Robinson, not only gave the drink its name but also designed the famous cursive logo.

The drink quickly became a hit in pharmacies, with Pemberton advertising it as a cure-all in newspaper ads.

However, in 1887, Pemberton’s health deteriorated, and he was diagnosed with stomach cancer. He subsequently sold part of the drink’s rights to others.

In 1888, Pemberton sold the remaining recipe for $2,300 to Asa Candler, who later founded the Coca-Cola Company and began mass production in 1892.

From that point on, Coca-Cola’s secret formula was kept tightly confidential, with only a few individuals aware of the exact recipe.

By the early 20th century, Coca-Cola rapidly expanded, especially succeeding in bottled sales. By 1950, Coca-Cola had become a global brand, with its formula regarded as a priceless asset.

When Coca-Cola entered the Indian market in 1950, India was in the midst of a post-independence transition, and its massive population presented a huge market potential.

Coca-Cola, through partnerships with local companies, achieved significant success in the Indian market.

However, by the 1970s, as the Indian government began imposing stricter regulations on foreign companies, the situation changed.

In 1973, India passed the Foreign Exchange Regulation Act (FERA), which required all foreign companies to dilute their equity to below 40% and transfer core technologies. This policy was aimed specifically at multinational companies, including Coca-Cola.

In 1977, India’s Industrial Minister George Fernandes demanded that Coca-Cola hand over its secret formula and transfer 60% of its equity to Indian entities.

Faced with this tough demand, Coca-Cola understandably could not comply. The secret formula was the company’s core competitive advantage, and surrendering it would mean losing its market edge.

Despite several rounds of negotiation, the Indian government refused to relent, and eventually, Coca-Cola was forced to exit the Indian market.

After Coca-Cola’s exit, Indian local beverage brands had an opportunity to rise.

The Parle Group introduced Thums Up, which quickly gained a foothold in the market, becoming the “Coca-Cola of India.” Meanwhile, the government supported the rise of other local brands, such as the state-owned Double Seven, further consolidating the position of domestic beverages in India.

However, with India facing an economic crisis in 1991, the government began easing foreign investment restrictions, and in 1993, Coca-Cola re-entered the Indian market.

By acquiring Parle Group’s brands, including Thums Up, Limca, and Gold Spot, Coca-Cola was able to re-establish itself in India.

Although the secret formula was never handed over, Coca-Cola achieved significant success in the Indian market once again.

The profound significance of this history is not just a simple business dispute; it involves complex dynamics between national sovereignty, economic autonomy, and multinational corporations.

The Indian government’s policies in the 1970s forced Coca-Cola out, but as the market opened, India’s economy became increasingly globalized. The battle between domestic brands and foreign corporations didn’t end there, but entered a new phase.

Today, Coca-Cola remains a giant in the global beverage market, and the Indian market remains one of its key markets.

From initial confrontation to eventual mutual dependence, the complex relationship between multinational companies and local governments has become a profound chapter in the process of economic globalization.