Search the Internet          Tips  Sites: Finance, Investment

Dabur JV barred from selling Chinese flavoured milk

Partha Ghosh

The government has barred Dabone International, a 50:50 joint venture between Dabur India and Bongrain International of France, from marketing flavoured milk and processed cheese in the country.

Flavoured milk was being imported from China and processed cheese slices from Australia.

At a recent meeting, the Foreign Investment Promotion Board observed that the original approval of the company was for manufacturing speciality cheese and other milk products that are not reserved for the small-scale sector.

It said that the company has been undertaking only trading activity without setting up any manufacturing facility and the Board thus recommended the proposal for rejection, sources said.

The company had recently sought permission to test-market the Le Bon brand of flavoured milk and cheese in the country. But the application came only after the secretariat for industrial assistance objected to the company engaging in retail marketing of the products without proper government approvals.

The board noted that Dabone has already been undertaking test marketing or trading of Le Bon brand of flavoured milk and processed cheese in India for over two years and the company is expected to have generated the desired market awareness in India by now.

Moreover, test marketing is permitted for a period of two years during which the company has to simultaneously set up manufacturing facilities. "In this case, that period is already over," the board said.

When the SIA learnt that Dabone was importing milk from China and selling it through select retail channels, it immediately asked the company to stop such activity "as the prevailing FDI policy does not permit domestic retail trading without obtaining prior and specific approval of the SIA or government."

DIL then sought approval for test marketing Le Bon brand of flavoured milk while assuring it will not import any flavoured milk till government approvals are received.

It also sought approval for trading of processed cheese slices, imported from Australia in terms of special import license obtained from the Directorate General of Foreign Trade in wholesale through its distributors and not in retail.

Dabone has already claimed its Le Bon flavoured milk venture was not retail trading.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report