It all began with Coca Cola India's (Coca-Cola) realization that something was surely amiss. Four CEOs within 7 years, arch-rival Pepsi surging ahead, heavy employee exodus and negative media reports indicated that the leader had gone wrong big time. The problems eventually led to Coca-Cola reporting a huge loss of US $ 52 million in 1999, attributed largely to the heavy investments in India and Japan. Coca-Cola had spent Rs 1500 crore for acquiring bottlers, who were paid Rs 8 per case as against the normal Rs 3. The losses were also attributed to management extravagance such as accommodation in farmhouses for executives and foreign trips for bottlers.
Following the loss, Coca-Cola had to write off its assets in India worth US $ 405 million in 2000. Apart from the mounting losses, the write-off was necessitated by Coca-Cola's over-estimation of volumes in the Indian market. This assumption was based on the expected reduction in excise duties, which eventually did not happen, which further delayed the company's break-even targets by some more years.