The Mumbai-based father-son duo Ravi and Gaurav Ghai are in talks to buy out the 40 per cent stake of their joint venture partner, UK-based spirits and retailing conglomerate Allied Domecq, of Maharashtra Dairy Products. The Rs 17-crore company markets the Baskin Robbins range of ice-creams.
The Ghais sold their Kwality brand to Hindustan Lever in 1994 and set up the joint venture with Allied Domecq the same year.
According to Pankaj Chaturvedi, CEO of Maharashtra Dairy Products, the Ghais will pay Rs 8 crore for Allied Domecq's stake.
Gaurav Ghai, MD of Maharashtra Dairy Products, was not available for comment. After the deal is completed, Maharashtra Dairy Products will be a 100 per cent licensing operation for Baskin Robbins. While it will continue to receive technical know-how from Allied Domecq, it will pay 2-3 per cent royalty on sales.
The move comes at a time when competition is heating up in the Rs 600 crore organised ice-cream market. International brands like Movenpick and Blue Bunny are already scooping out their range in India. And Nestle, which recently acquired Haagen Daz globally from General Mills, is believed to be eyeing a domestic launch.
In the past eight years, Allied Domecq--like most multinationals--had overestimated the market for ice-creams. Today, only one-fourth of its 4 million litre capacity is utilised.
Baskin Robbins has a 4 per cent share of the market dominated by Hindustan Lever's Kwality Wall's with 54 per cent and Amul with 35 per cent.
