Future Consumer terminates JV with New Zealand’s Fonterra

0
24

Future Consumer (FCL), a part of the Kishore Biyani-led Future Group, has agreed to terminate its four-year-old joint venture with New Zealand’s dairy firm Fonterra following pandemic-led disruptions in the Indian market.

The two companies have agreed to wind down their 50:50 joint venture, Fonterra Future Dairy. The firm’s board considered and approved the termination at its meeting on Thursday, Future Consumer said in a stock exchange update.

The discontinuation of business operations is subject to statutory approvals and consents. The venture has 22 employees, all of whom will receive “appropriate” entitlements, including career transition support and access to counselling, it said.

The last few years have been challenging for the joint venture, with the pandemic causing significant disruption to the Indian market. Despite this, it carried out some important initiatives, including the launch of the Dreamery brand, a range of consumer products made using Indian milk, and distribution of Fonterra’s New Zealand Anchor Food Professionals products for the foodservice sector. Both had received “positive” feedback from consumers and customers, the company said.

India remains a viable market for Fonterra and it will continue to have a presence and explore opportunities as they open up, the statement added.

FCL is among the 19 Future Group companies proposed to be merged with Future Enterprises and then transferred to Reliance Retail Ventures. In 2020, Future Group signed a deal to sell its retail, logistics and warehousing businesses to Reliance Retail, a subsidiary of Reliance Industries, for Rs 24,713 crore.

US e-commerce major Amazon has opposed the deal, citing a 2019 deal through which it acquired a 49% stake in Future Coupons, the promoter entity of Future Retail, for about Rs 1,500 crore. Amazon has alleged violation of certain terms of the 2019 deal.