Danone to return Tiger brand to Britannia

Dispute over competing investments may carry on.

French dairy foods company Group Danone has decided to return the Tiger brand to Britannia Industries, its equal joint venture with the Wadias.

The biscuit brand has been at the centre of a dispute between the partners, with the Wadias alleging that the French group had licensed its best-selling biscuit brand outside India without its knowledge.

Nusli Wadia, who is also the chairman of Bombay Dyeing, had threatened legal action if Danone did not return the brand by today.

"Danone has confirmed to Britannia its agreement in principle to return intellectual property material to Britannia," a Danone executive said in an e-mailed statement today.

The Wadias and Danone are equal shareholders in Associated Biscuits International Holdings, which owns 51 per cent of Britannia's equity.

The joint venture was forged in 1992. Tiger was launched in 1997 and went on to become Britannia's biggest brand.

The dispute goes back to 2004, when Wadia discovered that Danone had been selling biscuits under the Tiger brand in Indonesia, Malaysia, Singapore, Pakistan and Egypt. After more inquiries, it was discovered that Danone had registered the trademark in 1997 as its own in 70 countries, receiving approvals in 35.

"Danone has registered the brand Tiger in markets where Britannia is not present, thereby protecting the brand from being abused by others, with the full knowledge of the management and the board," the Danone executive maintained.

Wadia, however, insisted that the board had not been informed of the move.

To make peace with the Wadias, Danone even offered ¤1 million ($1.34 million) to Britannia for use of the brand, but the offer was rejected.

On its website, Danone mentions Tiger as its number one brand in Asia.

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 Managing Director Vinita Bali and noted investment banker Nimesh Kampani.

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

However, even if Danone gives up its claims to Tiger, the dispute may continue over the other key issue of competing investment.

Wadia has sued Danone for its ¤5 million investment in Bangalore-based nutraceutical firm Avesthagen. The matter is pending before the Mumbai High Court.

Wadia had also complained to the Union commerce ministry that Danone's investment in Avesthagen violated Press Note 1 of 2005, which makes it mandatory for a foreign company to take its Indian partner's consent for investing in another company in the same business in India.

Danone said today it had replied to the ministry, denying that it had violated Press Note 1.