The Hindu Business Line : Cadbury in damage control mode; Amul expects sales rise

The controversy, for example, saw Gujarat Co-operative Milk Marketing Federation (GCMMF) putting up advertising hoardings across Mumbai with the punchline `Cadbura' (which, in other words, implies, Cadbury is bad).

Mr Rahul daCunha, Director, daCunha Associates, the ad agency which has been handling Amul's account since 1966, told Business Line that the hoardings had been put up in Mumbai for about three days.

"Amul always does topical advertising for its outdoor hoardings. However, we change the hoardings every three-four days," he said. Mr daCunha added that there was no immediate plan to put up more Amul hoardings involving the worms controversy.

While a GCMMF official claimed that the controversy would result in Amul's market share increasing from the existing two per cent to 15 per cent, industry watchers are sceptical about the claim.

"For this, the company would have to increase its monthly production from the existing 60 tonnes to about 300 tonnes, for which it doesn't have capacity to manufacture either on its own, or source the products from Campco," said an industry expert.

Nestle India's spokesperson, meanwhile, said that the company had been unable to identify any significant trend at this stage. However, he added, "Negative publicity about products is bad for the entire category."

On the other hand, even as Cadbury India has officially admitted that there has "definitely been an impact on sales, which the company is not in a position to assess now", Cadbury has begun a damage control exercise.

To begin with, Cadbury has announced a three-step programme - Project Vishwas - involving its distribution chain and retail channels. According to a company statement, the programme entails a partnership with retailers on a war footing to build awareness about storage requirements for Cadbury products.

The programme will be implemented immediately in Maharashtra and extended nationwide thereafter. Over the next two weeks, a team of quality control managers along with 300 sales people will carry out checks of over 50,000 retail outlets across Maharashtra which stock and sell Cadbury products.

The teams will conduct visual checks on storage of chocolates.

As precautionary measures, they will also replace questionable stocks reducing significantly the chances of damaged products, the Cadbury statement stated.

Said Mr Bharat Puri, Managing Director, Cadbury India, "This three-step programme is a result of our discussions with consumers, our retail partners and the Food and Drug Administration in Maharashtra. We are confident this can improve the trust consumers place in our products."

According to industry estimates, the cocoa-based chocolates market (exclusive of sugar boiled confectionery) is estimated at 24,000 tonnes per year, valued at Rs 650 crore.

This segment includes moulded, panned, wafer-coated and count chocolates.

Prior to the controversy, Cadbury had approximately a 65 per cent share of the overall chocolates market, followed by Nestle at about 30 per cent, and Amul at two per cent.

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