Sweet start

Mumbai, May 23: After a brief hiatus, the troubled relations between Groupe Danone, the French foods giant, and the Wadia group have burst into the limelight once again.

Groupe Danone has revived plans to establish a wholly owned subsidiary in India and has communicated its intentions to the commerce ministry.

Although details of Groupe Danone’s latest plans are not known, the French dairy and biscuit maker is learnt to have told the ministry in a recent communication that it is keen to set up a greenfield plant in the country.

This could be under a new company that is entirely under its control. Groupe Danone has, however, not yet made a formal application to the Foreign Investment Promotion Board (FIPB).

Groupe Danone officials could not be contacted to confirm the development but the move has once again raised questions about the future of its relations with the Wadia group.

The Wadias and Danone have two joint ventures in India: the first is Associated Biscuits International Ltd (ABIL), which holds close to a 51 per cent stake in Britannia Industries; the other one is Wadia BSN India, which was set up in 1994 to introduce packaged foods from Danone’s international range and a few other products.

The two partners have been bickering over a lot of issues lately.

Britannia Industries, the Wadia group company, was upset as Danone used its well-known Tiger brand in other countries without informing them. Though recent reports said that Groupe Danone has refused to return rights of the Tiger brand unconditionally to Britannia Industries, it is also speculated that both the partners may be close to hammering out a settlement on this issue.

Groupe Danone and the Wadia group also crossed swords when the French group’s subsidiary proposed to invest in Avestha Gengraine Technologies, a Bangalore-based nutraceutical company.

Last December, the Wadia group moved Mumbai High Court charging Groupe Danone of breaching a joint venture agreement between them.

The Wadias added fat to fire by refusing to share its quarterly results with Groupe Danone and instead sent its accounts to ABIL.