Britannia threatens to sue French partner over brand rights


Kolkata : Britannia Industries Ltd Wednesday threatened to sue its joint venture partner, French dairy giant Group Danone, if negotiations failed to resolve the contentious issue of violation of trademark and brand rights by the latter.

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“We hope to have a settlement; it’s up to them whether they (Danone) will sell their stake to us,” Britannia chairman Nusli Wadia told reporters here Wednesday on the sidelines of the company’s 88th annual general meeting (AGM).

“Ownership of brand has to be where it belongs. And the same has been violated by Danone. The IPR (Intellectual Property Rights) Committee is meeting today (Wednesday) where the issue is slated to be discussed. We’re also in the process of initiating some legal action against Danone in India and the United Kingdom,” company managing director Vinita Bali asserted after the AGM.

The French company holds 50 percent stake through a group company in Associated Biscuits India (ABI), a 50:50 JV between Britannia and Danone. That, however, does not arm Danone with any right to use Britannia brands either in India or abroad.

While applying for a trademark licence in Malaysia for a brand, Britannia officials stumbled on a lead that ‘Tiger’, one of the power brands of Britannia, had already been registered by Danone.

A secret check revealed that Danone has been using the brand in five countries, got the same registered in about 40 countries and applied for registration in as many as 70 nations since 1998, Bali explained.

“We’ve immediately lodged a protest with Danone as the issue pertains to the ownership of the brand and ownership, it is obvious, is not contestable. Britannia has not authorised Danone to use any of its brands,” she clarified in reply to a question.

One of the options of settlement being explored is Danone selling its stake back to Britannia and exit the JV. Bereft of a sanction from Britannia, Danone could face legal hassles if the verdict of the IPR Committee went against it.

Britannia currently exports its products to the US, Australia and countries in Southeast Asia. The company has also applied for licence in the Middle East.

Asked if Britannia will foray into the ice cream segment following its acquisition of the Bangalore-based company Daily Bread, Bali said the company has been pitching for organic growth in strategic and economic segments.

Britannia, which has a cash reserve of Rs.4 billion, has planned a capital expansion of Rs.1 billion this fiscal to hike capacity and support innovation.

The French dairy giant had earlier rebutted the claim made by the Wadia group that its 5 percent investment in Bangalore-based bio-nutritional firm Avesthagen violates foreign direct investment norms.

It said that there was no reason to get a no-objection certificate from the Wadias for the investment in Avesthagen as its products did not compete with any of the businesses of Britannia.