Air India to Offer Only Snacks on Short-Haul Flights

MUMBAI Cash-starved Air India (AI) on Tuesday said it will be following the industry practice on in-flight catering services on all short-haul economy class flights from tomorrow, which will see the national carrier offering only prepacked snacks and not full meals as done earlier. “In line with the industry practice, AI has decided to revise the on-board catering services in the economy class for short duration domestic flights with effect from February 1,”

Chicking Fast Food Chain Starts Operations in India

NEW DELHI Dubai-based restaurant chain Chicking Fried Chicken, promoted by the Al Bayan Group of Companies, plans to set up 100 outlets in India by 2015, a company official said on Tuesday. The chain operates 25 outlets in the southern part of India. Yogesh Lakhanpaul, MD of Chicking’s North India franchisee KYM Foods & Beverages said: “We plan to expand in Delhi NCR, Punjab, Jammu & Kashmir and Kanpur, among other cities.”

Nestle India to Expand Nutrition Portfolio

NEW DELHI Swiss packaged foods firm Nestle SA’s India arm on Tuesday said Luis Cantarell, president and CEO of group company Nestle Health Science, has reaffirmed the country as a key focus market on a visit here. “Cantarell reviewed and discussed plans for expansion into nutritional solutions for people with specific dietary needs not met through normal diets,” the maker of Maggi noodles and Nescafe coffee company said in a statement. Commenting on the potential for specialized nutritional products in India, Cantarell said, “It is acknowledged that in India there is a significant shift towards lifestyle diseases like diabetes and obesity especially in urban areas.”

Hello, Your Mobile Bills will Bloat 30% this Year

After bleeding for long, telcos to go for bold tariff hikes

JOJI THOMAS PHILIP NEW DELHI

Mobile phone bills of consumers will rise 20-30% this year, top executives of all leading operators said, as the country’s debt-ridden telcos raise call tariffs to revive revenue growth and cut losses in the fiercely competitive sector.
The move follows the 20% increase last July, the first hike after operators slashed tariffs in 2008 as they chased new customers, but ended up eroding profits. It comes at a time telcos are staring at penalties and fines running into thousands of crores of rupees for a range of alleged violations.
Vodafone quietly raised tariffs of postpaid users in January by about 20% in Delhi and plans to extend this to other regions, with rivals set to follow suit this month. Telcos say tariffs for prepaid customers, who form 96% of users, will be raised after March.
An executive close to Bharti Airtel said a 20-30% rise in the next 12 months was the “minimum requirement for the industry to keep its head above water”. Even state-run BSNL, which did not raise rates last time, plans to increase tariffs, a top executive said.
An executive close to Reliance Communications said the industry needed higher charges to service its . 275,000-crore debt. “Except the top three, all operators are losing . 800-1,000 crore per quarter,” the executive said. Uninor Managing Director Sigve Brekke told ET recently if ‘incumbents increase tariffs, he would be the first to follow’, adding that customers could afford higher tariffs. India added 400 million users in the last two years, but revenues crawled 10%, and average minutes of usage per customer fell from 465 in 2007 to 350. “Inflation has been around 9% in the last two years. The industry paid . 70,000 crore for 3G spectrum. These services failed to take off and costs will eventually have to be passed on,” said the executive of a leading GSM operator. He said earnings from every minute of traffic had plummeted to 40-45 paise from . 1 in 2007.
Samaresh Parida, director, Vodafone, said government levies had raised costs. “If the government keeps on trying to extract more from us, we are left with no alternative.” DoT Issues Notices to 5 Telcos, Seeks 1,600 crore
The telecom department (DoT) on Tuesday issued showcause notices to five telcos — Bharti Airtel, Vodafone, Reliance Communications, Tata Teleservices and Idea Cellular — asking them to pay up about . 1,600 crore in total, for allegedly understating revenues and hence paying lower levies during 2006-07 and 2007-08. The notices were sent within hours of communications minister Kapil Sibal approving the DoT’s proposal to recover . 823.31 core towards unpaid levies during these two years. But the total payment for the industry is almost double this amount because the department has added spectrum usage charges and other levies on the alleged underreported revenues, in addition to imposing penalties and interest on outstanding.
Executives with telcos said all five operators were expected to seek relief from court. They also added that the DoT had misinterpreted accounting practices and standards when alleging that telcos had underreported revenues. On Monday, in a presentation to Sibal, the department said that these five operators together had understated revenues by . 10,268 crore during this two-year period. Since telcos pay 6-10% of their annual revenue as licence fee and 2-6% as spectrum usage charges, reporting lower revenue brings down the component they have to share with the government.
ET had reported this development in Tuesday’s edition. It is estimated that RCOM will have to pay . 551 crore, while for Bharti it will be . 292 crore. The penalties for Vodafone works out to be . 254 crore. ET has learnt that Idea will pay . 113 crore, Tata Teleservices . 273 core and Tata Comm . 120 crore. Last year, the law ministry had approved the telecom department’s plans to issue showcause notices to telcos on this issue.

P&G, Colgate, Henkel Fined by France for Detergent Cartel

PARIS Procter & Gamble Co, Colgate- Palmolive Co and Henkel were fined €361.3 million ($464 million) by French antitrust regulators for fixing the price of laundry soap. P&G, the maker of Ariel washing powder, was fined €233.6 million and Colgate must pay €35.4 million for colluding with others to set prices for detergent from 1997- 2004, the French regulator said in a statement on its website. Henkel, the German maker of Persil, was fined €92.3 million. Unilever wasn't fined because it was the first company to supply evidence to the French regulators. The fine is the largest imposed by the French competition authority this year in light of “the particular seriousness” and the “undoubted” harm to the economy, the regulator said. The French directors for the manufacturers, known by code names like Hugues, Pierre, Louis and Christian, met as many as four times a year at Paris-area hotels and restaurants to agree on the prices and promotions they would offer retailers, it said.

Videocon to Set Up Mobile Phone Facility Next Year

NEW DELHI Diversified business group Videocon plans to set up its first mobile phone manufacturing plant in India, which could entail an investment of up to . 75 crore in the initial phase. The company, which is looking to sell around 2.5 million mobile handsets next year, is scouting for locations for the new plant across the country, particularly in Kerala, Madhya Pradesh and Chhattisgarh. “Videocon is ready to put up a mobile phone manufacturing plant in India next year. At present, we source it OEMs (Original Equipment Manufacturers) here. Now we are going to start on our own,” Videocon Industries Director Anirudh Dhoot said. “We have been invited by Madhya Pradesh, Kerala and Chhattisgarh. We have not yet finalised the location. A decision on the same would be taken next year in February or March,” he said.

Coke Creates Independent Unit for Non-fizzy Drinks

In a global first, Coca-Cola India is creating an independent business channel to innovate, sell and distribute its juices, energy drinks, powder drinks and niche products like mixers to increase its stake in the soaring market for non-fizzy drinks.
“This will help fortify our existing business and execute the distribution and sales of new products for Coca-Cola India through a viable alternate sales and distribution system,” said T Krishnakumar, CEO of Hindustan Coca-Cola Beverages, which will run the new vertical, Minute Maid & Alternative Beverages division.
Minute Maid juices, Burn energy drink, Schweppes mixers like tonics and soda, Nestea ice tea and powder drink Fanta Fun Taste will be brought under the new division. It will also manage all non-fizzy beverages that Coca-Cola will launch in the future.
“This is first of its kind investment in sales and distribution for the Coca-Cola system worldwide, where an entire alternate system is being set up within a country for a selective set of beverage offerings,” a Coca-Cola spokesman said. The vertical will build new and nascent channels such as office complexes, gyms and spas, food courts, shopping malls and petrol stations for different products under its fold, besides using Coca-Cola’s existing network and accelerating its presence in grocery and convenience stores. “Specialised distributors will be appointed for specific channels,” the spokesperson said.
Fizzy drinks Coca-Cola, Thums Up, Fanta, Limca and Sprite will continue to be distributed through the firm’s existing sales and distribution network that covers more than 1.5 million retail outlets, out of an estimated 8 million potential outlets it can reach in the country.
Analysts say the move is aimed at getting a first-mover advantage in fortified drinks, which though small, are growing in high double digits.
Senior VP Milind Pingle, who was earlier operations VP for the central region, will head the new vertical that will have 200 employees to start with.
It will leverage the firm’s existing supply chain infrastructure, manufacturing plants, depots and other backend infrastructure to source its supplies and service the markets.
The division will be set up in phases across different markets in the country over the next three years.
The move comes a month after Coca-Cola India announced that its Atlantabased parent and bottling partners will invest $2 billion (. 10,000 crore) in the country over the next five years beginning 2012 — the single largest investment in one phase for the firm since it reentered the country 18 years ago.
Announcing the investment, Ahmet C Bozer, Coca-Cola’s president, Eurasia and Africa group, had said that India could become one of the top five markets for the company globally by the end of this decade.
India now ranks among Coca-Cola’s top 10 markets in volume globally, and is the largest market in the Eurasia and Africa Group.