Wadia-Danone Plan To Market Beer Shelved

Barely 11 months after signing an MoU with Mohan Meakin, Wadia-Danone, the 50:50 joint venture between Nusli Wadia group and Groupe Danone of France, has shelved its proposed foray into beer marketing.

The company will instead concentrate on food products initially and take up beer at perhaps a later stage.

Though company sources term it as a shift in strategy, industry sources term it a fall-out of the due diligence done by Danone representatives of Mohan Meakins breweries.

Wadia-Danone and Mohan Meakin had signed an MoU in July last year to explore possibilities of setting up a 50:50 joint venture to produce and market beer in the country.

Danone would route its major beer brands through the venture and Mohan Meakin agreed to transfer all its brands to the venture. S K Alagh, managing director of Britannia Industries confirmed the venture has been shelved.

Wadia-Danones basic approach is to concentrate on the food and beverage segments.

Our priority is to take products from the Danone stable which offer synergy with the distribution strengths of Britannia. Beer, has therefore, been put on the backburner for the moment, he said.

He added, however, that things may change in future as Wadia-Danone continues to explore various business avenues.

While beer continues to be a future option, we are obviously looking at food products in the first stage, he explained.

Industry sources say there could be other reasons behind the venture being called off.

Some time back, Danone representatives visited Mohan Meakins breweries to study and report on conditions and facilities at the plant.

Their report induced second thoughts in the minds of top management of Wadia-Danone.

The breweries were not up to international standards and would have to be upgraded by investing money.

Danone is one of Europes largest food companies with major presence in biscuits, grocery products, pasta, dairy products and beer.

Some of their major beer brands include `1664 San Miguel and `Kronenberg.

In India, Danone has three companies, a 100 per cent subsidiary, Danone India Ltd, Britannia Industries and Wadia-Danone. Danone and Nusli Wadia hold 22 per cent each in Britannia.

The French multinational is not the only company to tread warily on the beer market in India. Several other brands like Budweiser had announced interest in India, but nothing had materialised.

Only Carlsberg with the UB group and Fosters with the Kothari group look likely to launch their brands.