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US’ Pepsico Officially Left Indonesia

One of the largest beverage manufacturers in the world, Pepsico has officially left Indonesia - Photo: Special

JAKARTA (TheInsiderStories) – One of the largest beverage manufacturers in the world, Pepsico has officially left Indonesia. Pepsico, Inc., will terminate the production contract with PT Anugerah Indofood Barokah Makmur (AIBM) in Indonesia on Oct. 10, said spokesman on Friday (10/04).

It was stated, AIBM would no longer produce, sell or distribute drinks for PepsiCo in Indonesia. The two companies have informed their customers and employees about this policy.

However, the spokesman did not give further explanation the main reasoned PepsiCo and AIBM stopped the cooperation. He only mentioned that the company, which is headquartered in New York, USA, hopes to return to Indonesia someday.

Also, its not elaborated on the fate of the employees and supply chain left behind by the policy. Thus, beverage brands such as Pepsi, Mirinda, 7Up, and Mountain Dew will certainly not circulate again in Indonesia in the near future.

During this time, the production, distribution and sale of PepsiCo’ beverage brand in Indonesia is controlled by AIBM, the majority of whose shares are owned by PT Indofood CBP Sukses Makmur Tbk (IDX: ICBP). Initially, AIBM was a joint venture between ICBP and Japan’ Asahi Group Holdings Ltd., before decided to relinquish its ownership.

Two fast food companies in Indonesia, Pizza Hut and Kentucky Fried Chicken also terminated the cooperation contract with the carbonated beverage provider starting Oct. 1, 2019.

Quoting from local media, director at the industry ministry Abdul Rochim stressed that the withdrawal of Pepsico from Indonesia was not because the un-conducive business climate in Indonesia, but purely due to business problems.

Rochim emphasized that the growth of the national industry is still positive. He said Pepsico’ contribution to the domestic beverage industry was not as big as its competitors. Therefore, the impact is not too large.

“The current data shows that overall the growth of the beverage industry is still positive,” the director said

He revealed, the beverage sector in the first half of 2019 showed a growth of 22.74 percent which contributed 2.01 percent to the gross domestic products of the non-oil processing industry, with an investment value of foreign investment of US$68.72 million .

However, Rochim said the government will continue to facilitate problems that arise as in Pepsi. It aims to find a way out, and hopefully the brand can return to the Indonesian market.

Written by Staff Editor, Email: theinsiderstories@gmail.com