The food park projects of LMJ International at Bengal’s Jangipur and Sankrail are held up due to the problem of land acquisition and land utilisation for industrial purpose. The required land for the Jangipur project is 100 acres. But LMJ International has till now acquired only 30-40 acres of land. Due to a host of unsolved issues, the developer has not been able to utilise the acquired land for the food park. In the Jangipur project, the West Bengal State Food Processing and Horticulture Development Corporation, and the Central Warehousing Corporation of the government are also partners. It must here be mentioned that the two other food park projects that LMJ International is developing in Orissa and Tamil Nadu, are expected to be operational by April-May 2010. Jangipur Food Park is part of the proposed 30 large food parks to be set up in different parts of the country, by the end of the 11th Five Year Plan (2007-12). Apart from West Bengal’s Jangipur, some of the selected sites for food parks include Ranchi of Jharkhand, Rai Bareli of Uttar Pradesh, and Dharampura of Tamil Nadu. With a maximum government holding of 26 percent, the proposed food parks would be developed as a public-private partnership model. Each food park, proposed to be built on an area of 110-200 acres of land, is expected to generate employment for about 30,000 people, directly or indirectly.

PepsiCo and Coca-Cola, the two major soft drink producers, are planning to raise prices of their products to meet the expenses caused by rising sugar prices and a 15-day stock cap on the sweetener. Sugar, the price of which have doubled in the last one year, accounts for 25 percent of production cost for soft drinks. Soft drink prices are slated to go up by Rs. 2 for Rs. 8 and Rs. 10 of returnable glass bottles. Prices of these products remained constant from 2006. According to the India ’s spokesman of PepsiCo, price hike has become unavoidable because of the government’s new ceiling of 15 days’ inventory. While the low cost of the products, investments in bottling lines, transport and distribution footprint and introduction of beverages in multiple pack sizes, and localised marketing activities have helped the soft drinks industry to post all-time high growth in terms of volume of sales, the profit margins of the companies have come under severe strain. The soft drink companies resisted a price hike in the last three years, in order to keep the growth of volume intact.

The West Bengal government has eventually allowed the companies to procure farm produce from the farmers’ cooperatives and wholesale investors, and has also expressed its intention of amending the Agriculture Produce Marketing Committee (APMC) Act, in the near future. An amendment to this act could give a sigh of relief to the big players like Reliance, Metro Cash and Carry, Keventer Agro and others. According to Mortaza Hossain, the state’s Agrimarketing Minister, the amendment could be introduced “before the winter session of the assembly.” Once amended, the companies would no longer have to acquire the licenses from APMC to buy products from the terminal markets or what are called mandis, as farmers would be able to sell their products to the retail giants through their co-operatives. The farmer co-operatives or self groups would stand in between the big retailers and the individual farmers. According to West Bengal’s Finance Minister, Asim Dasgupta, the two primary objectives of amending the APMC Act are to keep the landownership intact with the farmers and offer the retailers fresher and better quality products. But only time would tell how long the farmers would be able to keep their independence intact from the interference of the dominant political groups of the area.

United Spirits, which accounts for 55 percent of India’s expanding drinks market, has decided to invest Rs.680 crore towards building four greenfield primary distilleries to enhance its supply security. Here it deserves a mention that United Spirits (USL) is the third largest spirits marketer by volume across the globe, with an impressive network of 76 distilleries and bottling joints. The sales volume of the United Spirits was pegged at 90 million cases during the last fiscal, out of which 39 percent was accounted by USL’s own distilleries. According to Vijay Rekhi, the Managing Director, USL, the sales volume of USL is expected to reach a figure of 150 million cases by 2013. The conglomerate has projected to achieve sales of 104 million cases in the current ongoing fiscal, and if it achieves that objective, it would be elevated to the position of the world’s second largest spirits farm. In the FY 2011, USL is envisaging to attain the top slot by going ahead of Diageo. In order to carry out this exponential growth in its sales volumes, USL needs to increase its supply security. Overall, USL envisages to increase its spirits production to 80 million cases from the current 35 million cases within the next 3-4 years, which would reduce its dependence on the liquid sourced from outside. Rekhi said the work on four new primary distillation facilities which are coming up in Haryana, Maharashtra, Andhra Pradesh and Karnataka, will start in the next year. These units will be large multi-substrate with capability to switch between molasses and grain distillation facilities. Along with this, USL will also undertake investments of an additional Rs.100 crore in two new malt and maturation units, taking the cumulative capital expenditure on the manufacturing side nearer to Rs.800 crore. It is also encouraging to see that the USL is growing at an impressive rate of 15 to 20 percent per year even during the recessionary period, at a time when other global players in the spirits market were at their low spirits; experiencing only single digit growths annually.

Lavazza S.P.A., the Italian coffee giant, announced plans to build a coffee processing plant in Chennai. The new plant, which would be the company’s first plant outside Italy, would be on the lines of its existing coffee processing plant in Turin. The Chennai plant is expected to be operational from 2011. With the start of the manufacturing process in India, Lavazza would be able to save around 110 percent of its import duty. The investment in India is in line with the company’s expansion plan in Asia which currently wields only 5 percent of Lavazza’s revenue. Setting up the new coffee plant in Chennai would enable Lavazza to utilise the relatively cheaper coffee beans and reduce the cost of production considerably. With the investment in India, the company also expects to turn the country into a base for penetrating into the markets of other neighbouring countries. Lavazza is largely banking on the disposable income of India’s youth. Lavazza made an entry into India’s coffee market in 2007 by acquiring Fresh & Honest Café, which serves ground coffee products and coffee vending machines, and also acquiring Barista coffee house business. The company is slowly introducing the Lavazza brand to Indian consumers by integrating Lavazza logo with the Barista logo. However, Lavazza denies any report of competing with Café Coffee Day, which runs over 800 stores in India as against the 200 stores of Lavazza. Although the Barista stores are not performing as per the expectations of Lavazza, its Fresh & Honest Café is successfully adding important clients and growing at quite a satisfactory rate.

Import of food products and personal care goods by the retail giants in India has gone up in recent times, posing a threat to the domestic FMCG producers in India. Reliance Retail, Spencer’s, Big Bazar, Food Bazar, Aditya Birla Retail and My Dollar Stores of Sankalp Retail have increased the volume of these imported goods as they provide greater margins and offer value and variety to consumers. Most of the imported products are coming from the markets of West Asia, the US, the UK, Taiwan and Thailand. The range of personal care products includes shampoos, soaps, skincare products, and other cosmetics. The imported range of food products that fills up the shelves of the retail stores generally includes chocolates, chutney, sauces, beverages and pasta. Some of the retailers prefer importing only personal care goods because of their durability. Filling up the empty shelves of the big retail stores with diverse products and multiple pack sizes is a huge challenge to the managers. As the domestic market has failed to meet the expectations, the managers generally look out for products available in different markets of the world. Then they compare the margin of profits of these products with those available in the domestic market. As some of these products offer profit margins which are higher by 20-30 percent than the domestic products, the demand of such products is increasing among the retailers of India. Faced with the challenge of rising imports, some of the domestic FMCG producers have alleged unfair competition, product cannibalisation, and loss of business opportunities. To restore buoyancy, they have invoked the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.

Anand Sharma, the Commerce and Industry Minister of India nullified any report of reviewing single brand retail in India. As per the foreign direct investment (FDI) policy of India, foreign investment is not allowed in multi-brand retail. The reports of introducing FDI in multi-brand retail came up in the context of Wal-Mart Chairman S Robson Walton’s recent meeting with The Prime Minister Manmohan Singh. Sharma clarified that Wal-Mart was not complaining about the current FDI policy which runs cash and carry joint venture in India with the Bharti Group. The current foreign investment cap on single brand retail chains is 51percent.

Devansh Ashar, a bar tender from Le Royal Meridien, Mumbai, has achieved the distinction of being the only Indian whose recipe got selected among the final six, in the Taste of Discovery Coffee Championship hosted by the world’s leading coffee brand Illy Café, held in Trieste, Italy. And Ashar is all of 22 years old. The championship was judged by the Chairman of Illy Café, Andre Illy and Master Barista, Fritz Storm. Devansh’s winning recipe Illy Café Mojito is now chosen to be featured in all Illy Café menus around the globe.

It is common knowledge that trans fats harm human health by increasing the cholesterol levels in the body, and also by facilitating an increase in the harmful fats in the blood. Increased intake of trans fats in one’s diet, makes one more prone to heart disease. It also impedes the cognitive function among older people. Now with an objective to reduce the risk of heart ailments resulting from the consumption of trans fat (TFA) packaged foods, the government is envisaging to limit the levels of TFA in partially hydrogenetated vegetable oils to 10 percent. An autonomous statutory body named the Food Safety and Standards Authority of India (FSSAI), which is administered by the Ministry of Health and Family Welfare, has taken an initiative in this regard. The institution has come out with a draft on this, which it has presented to the stakeholders. The industry however, states that the decrease in TFA levels to 10 per cent should be accompanied by an increase in melting point of the products that is higher than the current level of 41° centigrade specified by the Prevention of Food Adulteration Act (PFA). The government is justifiably unwilling to relax the guidelines pertaining to the melting point of partially hydrogenetated vegetable oils.

Lite Bite Foods announced plans to invest Rs. 100 crores in the coming three years to open 45 new stores across the country. The quick service food chain, promoted by Amit Burman, the Vice Chairman of Dabur, currently runs 40 stores. It is a franchisee of Subway, a fast food chain, that also runs Food Union, Fresco, Baker Street, and Pino s Pasta Pizza.

The Bordeaux Wine School (L’Ecole du Vin de Bordeaux) held a one day seminar in Delhi, Mumbai and Bangalore for wine educators, wine importers, food & beverage professionals and members of the media. The seminar was organised on 23rd October in Delhi, on 26th October in Bangalore and on 28th October in Mumbai. The one day master class was conducted by Ms. Wendy Narby, Bourdeaux’s renowned educator. Apart from providing a wonderful learning opportunity to the wine enthusiasts about Bordeaux wines, the participants were also provided with a certificate of attendance by L’Ecole du Vin de Bordeaux on successful completion of the master class. At the end of the seminar, the Bourdeax Wine School also conducted an assessment test for the candidates who were interested in becoming an accredited trainer for Bourdeaux. An interview session followed the assessment test in the next day, to shortlist the candidates for participating in a future accreditation week in Bordeaux.