Tesco to invest GBP85m in Tata JV in India

By Katy Askew | 21 March 2014

UK retailer Tesco has confirmed that it will invest GBP85m (US$132m) to establish a multi-brand retail joint venture with Trent Ltd, part of the Tata Group, in India.

The groups had signaled that they were looking at a deal to Tesco take a 50% stake in Trent at the end of last year. 

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The news follows regulatory approval of the move from India's Foreign Investment Promotion Board, Tesco said today (21 March).

Trent Hypermarket operates the Star Bazaar chain in India.

Tesco and Tata have worked in together in India since 2008. Under wholesale and franchise agreements, Tesco has supplied goods to the Star Bazaar chain.

The Indian business said the two companies would look to expand the Star Bazaar chain, which currently has stores in Maharashtra and Karnataka. 

Tesco is the first international retailer to take advantage of the easing of Indian restrictions on foreign direct investment in multi-brand retail.

Foreign companies were prohibited from investing in multi-brand retail outlets in India and overseas retailers like Tesco sought wholesale and franchise deals.

However, last year, India said it would allow international investors to own up to 51% of multi-brand outlets. 

International retailers including Carrefour and Wal-Mart have been studying the implications of the new regulations - and whether the remaining restrictions in areas such as sourcing could prove prohibitive to profitable growth. 

Earlier this month, Carrefour CEO Georges Plassat indicated the company could reach a decision on whether to expand in India in "a matter of months".

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US FDA starts to stamp out Indian bidis

Chidanand Rajghatta, TNN | Feb 23, 2014, 03.02AM IST

WASHINGTON: The US Food and Drug Administration (FDA) on Friday banned four kinds of bidis from a little-known company in India as part of a renewed American effort to stamp out unregulated import of dangerous tobacco products under new authority vested in the agency. 

Just days after FDA commissioner Margaret Hamburg returned from India, agency officials announced that four bidi brands made by Jash International — Sutra Bidis Red, Sutra Bidis Menthol, Sutra Bidis Red Cone and Sutra Bidis MentholCone — may no longer be domestically sold, distributed or imported. 

The bidis were banned not because of any imminent danger — although it is well-known that all tobacco products are dangerous — but because Jash failed to provide ingredient information that is mandatory under new rules. 

In a conference call on Friday, not specifically related to the bidi issue, commissioner Hamburg denied the FDA was targeting Indian companies, but said the United States has a strict quality control regime for all products being imported into America. 

''When products are sold in the United States for use by American citizens, then those products have to meet our regulatory standards and requirements and we inspect those facilities in other countries as well," she told reporters after her first official trip to India, where FDA action against India-based pharmaceutical companies have been the focus of attention. 

But US efforts to stamp out bidi imports and smoking in America has a history going back some two decades when the Indian mini-cigarette started to become a fad among youth after hippies had first lit them up in the sixties. A 2002 survey showed close to 3% of American male high school students had tried bidis, which, because they were largely unregulated, were easier for the youth to access — particularly after the US cracked down on sale of cigarettes to the under-aged. 

Over the last decade, bidis also began to appear in various all-American, candy-like flavors: chocolate, vanilla and strawberry, adding newer flavors such as grape, cinnamon, watermelon, menthol, black licorice, wild cherry, and mandarin orange, as the craze caught on. No accurate figures are available about the extent of bidi imports from India but estimates by an international trade group in the 1990s put import from India at 448 million pieces valued at less than $5 million. 

The Clinton administration tried to ban import of beedis around that time after a CBS 60 Minutes program showed child labor in the industry that employs an estimated 3 million people in India. But it was never fully carried through. 

The health and economic cost of smoking is something that has seized developed countries even as developing countries continue to get sucked into western-inspired tobacco consumption that is far more lethal and pervasive than bidi imports to America. 

A 2010 WHO study estimated that smoking in developed countries will amount to 29% of world tobacco consumption (down from 34% in 1998), while developing countries' share, now said to be growing at around 3% every year, will be 71%. Some six million people die every year from tobacco-related illness — 80% of them in low-income countries

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Food items rotting in ports and airports as govt introduces new packaging rules

By Jharna Thakkar & Urvashi Seth, Mumbai Mirror | Feb 22, 2014, 12.28 AM IST

New Indian labeling requirements for imported foods and ingredients have led to a severe shortage of such items in Mumbai and across the country, hitting kitchens of top restaurants. 
Huge consignments of imported meats, cheeses, sauces, edible oil and even mayonnaise, among other popular items, are held up at airports and ports over what authorities describe as insufficient information on the packages' labels. 

The dwindling supply has left chefs wondering how to serve Greek salad without feta cheese, Miso soup minus silken tofu or Thai curry without fish sauce. 

It's also eating into restaurants' profits: prices of foreign foods - labelled in Spanish, Japanese and Italian - have now doubled in Mumbai's markets, but most eateries are unable to hike rates on their menus after having already done so recently. If the supply doesn't improve, they may be forced to pass on the costs to the patrons. 

It's not just eateries. Foodies, too, are struggling to get their favourite Italian Parma ham or Thailand's Sriracha sauce from local vendors and at big stores. 

"We are facing import challenges along with the industry to source international range of products," read a sign stuck in the food section of HyperCITY, Vashi. 

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Indian court stays FSSAI action on product approvals

By Ankush Chibber,11-Feb-2014

One of India’s highest courts delivered a split verdict on whether the country’s relatively new food regulator had the right to subject existing products to its approval process. 

The petition filed by Vital Nutraceuticals and the Indian Drug Manufacturers' Association, which was challenging a May 2013 advisory that made it mandatory for packaged food, beverage, health drink and supplement makers to disclose any ingredient or formulation change to the FSSAI. The Bombay High Court was ruling on a petition that questioned whether the Food Safety and Standards Authority of India (FSSAI) had the power to issue guidelines requiring existing manufacturers to take approval for products already in the market.

Approvals unconstitutional 

Of the two-judge bench, Justice VM Kanade ruled on February 4 that such approval for products that are already in the market was unconstitutional.

“If the food authority is permitted to carry out the exercise, it would result in a chaotic situation whereby all existing manufacturers, who have had valid licences for several decades, would be required under the garb of this advisory to obtain product approval even for existing ones,” said Kanade.

“And, until the product approval is not granted, they would be precluded from marketing the said products, which have been on the market for a sufficiently long time,” he added.

However, his colleague, Justice Girish Kulkarni, said the right to safe and uncontaminated food was held to be a fundamental right under the constitution.

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Related News: HC stays advisory to FMCG firms on ingredient disclosures

China gorges on Indian buffalo via Vietnam

India’s buffalo meat (carabeef) exports to Southeast Asia are growing fast, thanks to rising demand in China, even though the world’s second-biggest economy has not officially opened its doors to India in this sector.

According to data from the Agricultural and Processed Food Products Export Development Authority, overall exports to Vietnam between last April and October rose by almost 200% in value terms and doubled in terms of quantity compared to 2012.

Up the Mekong

At the same time, carabeef exports rose overall by 46% in value terms to US$2,361m, and 23% in quantity. Overall exports are expected to cross US$4bn over the coming year, compared to US$3.19bn just a year ago.

Vietnam accounts for 40% of India’s carabeef exports, although this is not from direct demand¾China is the world’s biggest consumer of buffalo offal, leading traders in Vietnam to re-export their supplies of Indian carabeef to their neighbour.

China has given an in-principle approval to direct carabeef imports from India this year, but it is yet to formalise the decision. According to Arjun Chavan, a Mumbai-based halal meat and frozen foods exporter, this has not yet stopped traders from tapping this fast-growing opportunity.

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Action against FBOs failing to convert licences by Feb 4: Chandramouli

Thursday, January 23, 2014 08:00 IST 
Ashwani Maindola, New Delhi

Speaking on the sidelines of a conference held at the National Institute of Food Technology, Entrepreneurship and Management, K Chandramouli, chairman, Food Safety and Standards Authority of India (FSSAI), said the apex food regulator would take action against food business operators (FBO) failing to convert their licences, as prescribed by the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011, by February 4, 2014.

However, he said he was hopeful that the work pertaining to conversion would be completed by the prescribed date. “The deadline of February 4, 2014 is not for new licences. It is for conversions only. We expect that the conversions would be complete by the deadline. If not, we will take action. As far as new licences are concerned, it is a continual process,” he informed.

It must be mentioned here that the deadline for FBOs to obtain licences and get registered under the new set of rules is approaching, and reports suggest that the process has been sluggish in many parts of the country. While Maharashtra and Gujarat are leading, Delhi is at the bottom.

However, industry sources felt that it was highly unlikely that the conversion would be complete by the deadline. Most of them said they expected FSSAI to extend the date given the slow process of licensing and registration and the huge backlog which remained to be cleared.

When quizzed about the database for packaged drinking water, the FSSAI chairman stated that it was also a continuous process, and actually was an enforcement issue, which had to be checked constantly. Chandramouli said, “Wherever we find shortcomings, we will take action.”

When asked if there was a proposal from FSSAI regarding ban on junk food in schools, Chandramouli said that the matter had come up in the court. Only after the court’s direction would the apex regulator implement it.

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Happy New Year 2014

FOOD Konnect team wishes everybody a Very Happy & Successful Year 2014