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Monday, August 14, 2006

PepsiCo's Reaction to Indian Ban - Indian CEO takes Helm

PepsiCo anounced today that Indra K. Nooyi, formerly the chief financial officer and a director for PepsiCo will take the helm as the new CEO replacing Steve Reinemund.

Wall Street was surprised by Reinemund's decision to step down.  Recently, India decided to ban many PepsiCo (and Coca Cola) products on fears of pesticide contamination.  The ban has proven to be highly controversial.  Claims have been made that the India government is protecting local markets by blocking interntational business.  The Indian public has reacted very negatively against the potential of pesticide contamination.  The companies themselves have made claims and offered evidence to show that they are in compliance with both local and international standards.

Now, a Indra Nooyi makes headlinse by taking the helm of PepsiCo.  She makes headlines in the US for becoming the head of the 2nd largest company under CEO control by a woman.  The true headline that seems to be overlooked is PepsiCo's decision to put an Indian born CEO in control of a US multinational amidst the turmoil that embroils PepsiCo in the World second most populous country India.

The decision seems very pragmatic and shows a level of political sophistication at PepsiCo that reflects positively on the company, its former CEO and the companies future.