Wadias, Danone to revive talks

The warring promoters of FMCG major Britannia "" the Wadias and the French dairy giant Danone "" are looking at sorting out intellectual property rights issues in their joint venture as a first step towards any larger solution. The peace talks held between the two in London recently had ended in a deadlock.

Sources say the talks would now focus on the terms and conditions for Danone to use the Tiger brand and at the same time let Britannia use Danone's brand of Little Hearts. "There are many issues involved between the two but the priority is Britannia," said a source.

Official spokespersons of both Wadia group and Danone did not comment on the negotiations.

Insiders, however, say the Wadias' demand for a stake in Avesthagen was not acceptable to Danone. "No offer was made to the Wadias on Avesthagen in the London talks," an industry insider said.

Both sides, led by Chairmen of Danone and Britannia, however agreed to resume the talks so that Britannia marches on its high-growth path.

The dispute between the Wadias and Danone erupted after Britannia refused to consolidate its financials with Danone group and instead sent the financial details to Associated Biscuits in which both partners hold equal stake. Britannia had objected to Danone's using the Tiger brand name, in other countries without its approval.

Later, Nusli Wadia, chairman of Britannia, moved the Mumbai High Court against Danone's 5 percent equity investment in Bangalore-based Avesthagen and complained to the Commerce Ministry that Danone has violated the Press Note 1 which requires a no-objection certificate from the Indian joint venture partner.

Danone had said that they do not require NOC from the Wadias as Avesthagen was a bio-nutritional firm and not competing with Britannia.

Associated Biscuit now holds close to 51 percent stake in Britannia and the management control of India's biggest biscuit company is turning out be another key issue between the partners.

With India and China turning out to be the key investment destination for Danone, the Wadias fear that Danone wants to make a foray into other categories without taking them as a partner.

Sources close to the Wadias cite Avesthagen investment as an example of Danone not taking them into confidence even though they have three joint ventures.