Indians refuse to sell Cadbury goods

Cadbury has received a blow to its ambitions in India after the country’s biggest listed retailer refused to sell the UK company’s products amid allegations of discrimination.

Pantaloon Retail alleges that Cadbury has discriminated against it by giving preferential prices and treatment to rival retailers including Germany’s Metro and Shoprite from the US.

Kishore Biyani, chief executive of Future Group, which owns Pantaloon, said: “We are taking their products out of the stores. We are not receiving the same treatment as others. They are giving better prices to other operators.”

A spokesman for Cadbury said: “As far as we are concerned, negotiations are still under way and we are still trying to find a mutually agreeable set of terms.”

The dispute, which will affect about 200 Pantaloon stores, threatens to harm Cadbury’s business in India, where it holds a 71pc share of the chocolate market and grew revenues more than 20pc last year.

It is not the first disagreement Pantaloon has had with a global food or drinks company.

A previous dispute with Pepsi, which Mr Biyani said was focused on disagreements about profit margins, resulted in Pantaloon taking some of the drink giant’s products out of its stores. That row has since been resolved and Pantaloon is again stocking Pepsi products.

The Cadbury dispute revolved around “pricing, margins and discrimination”, Mr Biyani said. He declined to say how much the Cadbury contract was worth.

One industry source downplayed Pantaloon’s claims. “This is just a negotiating tactic and one they have used before. In greenfield markets such as India, which are still maturing, these tactics are a lot more common.”

In the UK, retailers are reluctant to make their disputes with branded food suppliers public for fear of losing the chance to stock their products.

Global food and drink companies have increased their focus on the developing world in recent years as consumer markets have boomed. Industry insiders said the dispute suggested that local companies were growing more confident about standing up to foreign multinationals on pricing and other issues.

Pantaloon is expected to make revenues of more than 57b rupees (£685m) this year, according to JP Morgan. That is forecast to grow to 90bn rupees in 2009 and 124bn rupees in 2010, highlighting the growth potential of the company.

Cadbury has previously labelled India’s 41bn-rupee confectionery sector as a “battleground and must-win market”, according to local media reports.

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