FMCG & Retail wrap: Shoppers Stop’s aggressive growth plans, CCI penalty on beer companies for cartelisation

After a washout year for retailers, lifestyle retailer Shoppers Stop has laid out aggressive expansion plans through its core business. With a sharp focus on growing its omnichannel, private label, beauty and private shopper segments; the company’s MD & CEO Venu Nair told CNBC-TV18 in an exclusive interview that the retailer expects to double its business in three-four years.

This aggressive expansion plan will see the company opening 10-12 department stores and 5-10 beauty stores by March 31, 2022, while growing digital and omnichannel business by 15-20 percent in the next three years, if not higher.

Private labels and the beauty businesses will be the other two growth drivers. Shoppers Stop aims to launch new private labels that would cater to emerging lifestyle needs and more than double the private labels business over the next 12 months. On the beauty front, it will launch 50 new brands in the next 12 months, while doubling its online beauty business.

Shoppers Stop’s confidence could also stem the faster-than-expected recovery that the retail industry has seen from the lows of the second wave with some regions nearly recovering to pre-COVID levels of 2019. And with vaccination picking up in India, shoppers Stop, and the industry say they are seeing increased confidence in consumers to not only visit stores, but also time spent on browsing and shopping with ease at the stores.

A similar show of confidence also came from Raymond Group’s CMD Gautam Singhania who told CNBC-TV18 at the launch of its new shirting garment collection ‘Vibez’ that all its businesses are recovering and are currently anywhere between 90 and 110 percent of pre-Covid levels.

India’s antitrust watchdog has penalised beer companies for indulging in cartelisation in sale and supply of beer in various states and UTs across the country, in various ways including through the platform of All India Brewers’ Association (AIBA) from 2009 to October 10, 2018, with Carlsberg India joining in from 2012 and AIBA serving as a platform for facilitating such cartelisation since 2013.

According to the CCI’s order, United Breweries Limited (UBL), SABMiller India Limited (now renamed as Anheuser Busch InBev India Ltd (AB InBev’ post acquisition) and Carlsberg India Private Limited (CIPL) engaged in price co-ordination in Andhra Pradesh, Karnataka, Maharashtra, Odisha, Rajasthan, West Bengal, Delhi and Puducherry.

These companies also restricted supply of beer in Maharashtra, Odisha and West Bengal in contravention of the provisions of Section 3(3)(b) of the Act, among other violations found.

Carlsberg and UBL, which were fined Rs 120 crore and Rs 750 crore, respectively, told CNBC-TV18 that they were examining and reviewing the order after both companies were given benefit of reduction in penalty under the provisions of Section 46 of the Act - 40 percent to UBL and 20 percent to CIPL.

Meanwhile, AB InBev has been given a 100 percent benefit of reduction, meaning no penalty will be imposed on Ab InBev by the regulator.

“The CCI decided that we were the sole company identified as receiving no penalty whatsoever and noted that we had ‘initiated internal definitive corrective administrative and HR measures’ as well as ‘initiated widespread compliance programs for its employees.’ We are pleased with these comments as we take compliance and ethics very seriously,” an AB InBev India Spokesperson said.

India’s food safety regulator may introduce the long-pending front-of-pack-labelling (FOPL) for packaged foods to curb consumption of junk food. The Food Safety and Standards Authority of India (FSSAI) CEO Arun Singhal said earlier this week that there was a need for packaged foods to display information in a simpler manner about the impact of their consumption so that consumers are able to make an informed choice.

The regulator has been pushing for this since nearly two years now, and last year it had proposed the same in the draft of the Labelling and Display regulations, but discussions with the industry had not been successful.

The regulator wants packaged foods to display red colour-coding on front-of-the-pack labels on packaged food products that contain high-fat, high-sugar and high-salt content levels.

According to industry sources, several concerns have been raised by a few in the industry, including a concern that an upfront warning could deter consumers from buying the products, which would then impact sales of consumer food companies.

Some also say that there is a difference of opinion in the nature of labelling in terms of what ingredient or substance needs to be displayed in the FOPL. FSSAI’s Singhal also said that there has been consensus on most technical aspects, the nature of the labelling is yet to be decided upon with the industry. For now, FSSAI has roped in IIM-Ahmedabad to conduct a survey on this, and on the basis of which, Singhal said, regulations will be drafted.

The RP-Sanjiv Goenka Group on Thursday announced that it has forayed into personal care segment with the launch of skin and hair care products through its FMCG venture Guilt Free Industries and is targeting Rs 400-500 crore in revenue in four-five years.

Cashing in on the growing trend toward natural products, the group has launched shampoo, hair conditioner, face wash and face creams based on natural ingredients under a brand called Naturali.