The $80-billion Altria Group, the holding company for tobacco giant Philip Morris, foods major Kraft and brewer SAB Miller, is planning to push for the induction of three of its nominees on the board of Godfrey Phillips India (GPI), its Indian tobacco associate. | |
| Philip Morris International had withdrawn all its directors from the GPI board in the mid-1990s, citing corporate governance issues. |
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| GPI is now under full management control of Altria's local partner, the KK Modi group, and both hold over 36 per cent each in the company. |
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| The New York-based company had also offered to buy out Modi from the venture. But Modi is understood to have turned down the offer on price grounds and has even declined to issue a no-objection certificate (NOC) as is required by Philip Morris to enter India independently under current FDI laws. |
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| Dinyar S Devitre, senior vice-president and CFO of Altria Group Inc said, "India is one of the important markets for the Altria Group and we want to invest and grow our business here. But Modi is not willing to sell, and will not issue an NOC either." |
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| He said that without more control of the Indian operations, Philip Morris will not be able to grow in India. |
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| Philip Morris, only in November, entered into an independent marketing arrangement to sell Marlboro, by-passing the Modis. |
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| "We plan to up the tempo on lobbying against the FDI rules which prohibit us from expanding in India. We also plan to take the help of the US government to negotiate with the Indian government on the issue," Devitre said. |
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| "Brands such as Marlboro will account for only a small portion of the business. But the growth will come from the mass market, which is why we need to get into manufacturing in India and sourcing from Indian tobacco farmers," he said. |
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| While the Altria Group associate SAB Miller, the world's second largest brewer, has already picked up a 50 per cent stake in Shaw Wallace (now SAB Miller India), it is planning to get into the foods business in a big way. |
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| "We see tremendous potential in the packaged and processed foods segment in India. Our associate Kraft is drawing out big plans. We will soon have more than a niche presence in India," Devitre said. |
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| "Biscuits, coffee, cheese and powedered drinks are some areas we could get into," he added. The Altria Group owns global mega brands such as Maxwell House coffee, Tang juices, Kraft cheese and Toblerone chocolates. |
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