Danone offers $1.34mn to use Tiger brand

French dairy major Groupe Danone has offered to pay the Wadia Group euro 1 million ($1.34 million) as compensation to use its Tiger brand in international markets.

According to a report in the Financial Times, Danone has also asked for a five-year exclusive licensing agreement in countries like Singapore, Malaysia and Indonesia.

Meanwhile, a television channel reported that the commerce ministry had come around to the view that Groupe Danone had violated Press Note 1 regulations, which make it mandatory for a foreign company to take a no-objection certificate from its Indian partner if it is investing on its own in the same business.

Nusli Wadia and Danone have equal stakes in Britannia. Wadia had objected to Danone's investment in nutraceutical firm Avesthagen. The Wadia group had moved the Bombay High Court and also lodged a complaint with the Union commerce ministry.

The Wadia Group reportedly wants the rights to the Tiger brand returned to Britannia before it negotiates with Danone on the issue. The Britannia intellectual property rights committee is believed to have given Danone a 60-day deadline last month to return the Tiger brand to the company, which ends on April 30. When contacted, a Wadia Group spokesperson declined to comment.

The Wadia Group and Groupe Danone are equal shareholders in Associated Biscuits International Holdings, the majority shareholder in bakery products company Britannia Industries.

Danone has registered the rights to the Tiger brand in about 70 countries, something Britannia has objected to because the brand was developed locally by Britannia.

This also prevents Britannia from exporting it to markets outside India, which the latter is not happy about. On its website, Danone mentions Tiger as its number one brand in Asia. This is a possible reason for it asking for continuing rights to use the brand in other markets.

Launched by Britannia in 1997, Tiger has since become the company's largest brand. Danone launched the glucose biscuit brand in other countries in the South-Asian region, too. Since the brand has been registered by Danone in other markets, it

Britannia set up an intellectual property rights committee in May 2006 to address all matters concerning Tiger and its other brands, which included Wadia Group chairman Nusli Wadia, Britannia MD Vinita Bali and Nimesh Kampani.

The intellectual property rights issue is believed to be among the major reasons why Britannia stopped sharing its quarterly results with Danone last year on the grounds that Associated Biscuits International Holdings, and not Danone, was a shareholder in the company.