Turkish delivery app Getir is in talks with its German competitor Flink regarding a possible acquisition, as reported by the Financial Times on Monday. This move towards consolidation could have significant implications for the food delivery market in Europe, which has been struggling with a slowdown since the Covid-19 pandemic.
The paper, citing insiders, has indicated that while negotiations are underway, there is no guarantee that the parties will come to an agreement.
Both Flink and Getir have declined to comment on the report.
The report also mentioned that Flink is currently in discussions with its existing investors to raise approximately $100 million, with a valuation exceeding $1 billion.
Last December, Getir acquired German grocery firm Gorillas for $1.2 billion, thereby bringing together two of the few companies in Europe that provide groceries within minutes.
Despite their rapid growth, quick commerce businesses were negatively impacted by a decrease in demand for deliveries due to lockdowns and increasing interest rates in March of last year. Moreover, investors lost interest in tech firms that were not profitable, which further worsened the situation.
The Federation of Indian Micro and Small and Medium Enterprises (FISME) held a “National Workshop on Growth of Retail & E-commerce in India” to address the policy barriers that impede small businesses and retailers from venturing into digital retail and e-commerce.
Over 40 delegates, comprising representatives from MSMEs, payment service providers, think tanks, e-commerce and last-mile delivery platforms, and industry organizations such as Amazon, Meesho, Zomato, BlinkIt, PayU, Shiprocket, and others, attended the consultation. The objective was to offer productive suggestions to the government on how online and offline channels can collaborate to usher in the new era of retail 4.0.
During the consultation, the focus was on the reforms necessary to integrate offline and online retail channels. Over the past two years, there has been a significant shift in consumer purchasing patterns, particularly in tier 2 and tier 3 cities, where e-commerce has gained popularity. Consumers now have the flexibility to purchase and compare products online, pay digitally when shopping from offline stores, and return products from the comfort of their homes. Despite this, only approximately 10% of India’s small businesses sell their products online.
The existence of multiple regulations for online platforms creates overlapping rules and a sense of uncertainty within the entire ecosystem. Additionally, there is an imbalance in regulatory requirements between online and offline sellers, resulting in online sellers having to bear the burden of additional compliance obligations. These obligations include disclosing the country of origin for their goods and services, ensuring the authenticity of imported products, and providing a detailed breakdown of product charges.
Furthermore, small sellers often lack digital literacy on how to expand their businesses through online platforms like Amazon and ONDC. However, MSMEs can benefit from the expertise of online platforms, which offer easy access to exports, last-mile delivery solutions, warehousing and logistics support, and training and skill development programs.
Rajneesh, Additional Secretary & DC, MSME, Ministry of MSME said in a statement, “India is an aspirational country – we are on our way to becoming a $5 trillion economy and will soon also be $10 trillion economy. This won’t be possible by only relying on traditional ways of businesses. E-commerce is a disruptive force for unleashing the potential of MSMEs in India. We, at the government, realise the relevance and importance of e-commerce. We are in line with the recommendations shared by FISME and the MSME representatives present today. We are committed to digitise businesses so that they can recognise the true value of e-commerce in growing their business and contributing to the the economy at large.”
Anil Bhardwaj, Secretary General, FISME, said, “There is an urgent need to educate MSMEs on the benefits of online selling, such as access to a wider audience and nuanced market intelligence. We need to establish a level-playing field between online and offline businesses, and limit the additional compliance burden imposed on online sellers.”
Several important recommendations were proposed during the consultation, including:
GST parity: Low digital adoption can be attributed, in part, to the intricate compliance requirements for Goods and Services Tax (GST) that hinder the transition from offline to online selling platforms. Currently, online businesses are obligated to register under GST regardless of their turnover. In contrast, offline sellers are only required to register if their turnover exceeds INR 40 lakhs. This creates an uneven playing field between offline and online retail, thereby contributing to low digital penetration.
MSME empowerment: Small and Medium Enterprises (SMEs) are a vital component of India’s economy, contributing nearly 30% to the country’s GDP and playing a crucial role in achieving the goal of a $5 trillion economy. To facilitate and empower SMEs, policies must include provisions such as exemption from import duties on returns, assistance with inventory and order management for new businesses, simpler funding options, and subsidies. Additionally, efforts should be made to increase awareness around digital marketing for new SMEs.
Enabling e-commerce policy: As India experiences rapid digitization, it becomes increasingly critical for SMEs to embrace e-commerce to ensure the sustainability and resilience of their business. To facilitate this, the government must implement simpler and more accommodating policies for online businesses. Regulatory requirements for online and offline sellers must also be made consistent, and online sellers should be exempted from additional compliance obligations.
Driving awareness: Many SMEs lack awareness about the advantages of e-commerce platforms and the regulatory obligations involved in selling online. To assist small sellers, policies must be put in place to increase women entrepreneurs’ participation, introduce a standardized e-commerce logistics policy that simplifies the onboarding process for new SMEs, and provide information about the process. Additionally, an informational portal that serves as a one-stop-shop for regulatory policies can help educate SMEs about their obligations.
French spirits maker Pernod Ricard India’s MD, Paul-Robert Bouhier, has resigned from his position within a few months of his appointment. In a press release on Monday, the company announced that Jean Touboul would take over as the new Managing Director, effective from May 1, 2023.
The departure of Bouhier and the appointment of Touboul come at a time when Absolut Vodka maker, Pernod Ricard India, is facing regulatory challenges in the country.
As part of his new role, Touboul will be reporting to Philippe Guettat, the Chairman and CEO of Pernod Ricard Asia.
“What I look forward the most in my new role, is to drive our many strategic priorities and the vast opportunities in a culturally diverse market that India is,” Touboul said on his appointment.
Before taking up the role in India, Touboul was the Managing Director of Pernod Ricard’s South-East Asia entity in Singapore. He has also served as the Chairman and CEO of Pernod Ricard Korea and as the Managing Director for South-East Asia. It’s worth noting that Touboul began his journey with Pernod Ricard Europe in 2004 as a Financial Controller and Internal Auditor.
Pernod Ricard India, the liquor giant, has been grappling with significant regulatory challenges and allegations of earning profits illegally and flouting Delhi’s excise policy to gain a bigger market share. The company’s recent application to renew its liquor sale license was denied by the Delhi Excise department due to its supposed involvement in the Delhi Excise policy case.
In addition to this, K T Rama Rao inaugurated the 'Innovation in Food Processing Grand Challenge', which invites startups and innovators from Telangana and across India to develop solutions that can improve local food processing.
According to the Telangana government, the ‘Food Conclave 2023’ concluded on a high note last Saturday, with an investment of more than INR 7,000 crore being attracted. This investment is expected to create over 58,000 direct jobs.
As per a press release issued by the state government, the one-day ‘Food Conclave 2023’ has a reputation as one of the most prestigious and influential gatherings in the food-agri community. The release stated that the event showcased a range of new partnerships and investments, strengthening its position as a crucial platform for shaping the future of the industry.
Industries Minister K T Rama Rao, in his inaugural address, said Telangana identifies food processing as a core thrust area and during the past five years, the state has added more than INR 7,000 crore worth fixed capital base to food processing capacities in order to boost the sector.
“At the end of the conclave, the state received more than INR 7,000 crore investment commitment across the sectors in aqua, dairy, agro processing, and allied sectors creating total direct employment of 58,458 by way of these investment opportunities,” he said.
In addition to this, Rama Rao inaugurated the ‘Innovation in Food Processing Grand Challenge’, which invites startups and innovators from Telangana and across India to develop solutions that can improve local food processing. It has been announced that the Food Conclave will now become an annual event.
Under the proposed plan, students receiving mid-day meals will be offered either chapatis or khichdi made from bajra, along with a serving of either vegetables or moong dal. (Representative Image)
To enhance the nutritional value of mid-day meals, students attending government schools in Uttar Pradesh could soon receive millets at least once a week.
The proposal to designate the year 2023 as the ‘International Year of Millets’, put forth by the Government of India, has been endorsed by the governing bodies of FAO (Food and Agriculture Organisation) and the 75th session of the UN General Assembly. Thus, 2023 has been officially declared as the ‘International Year of Millets’.
In recognition of a proposal put forth by the Government of India and endorsed by members of the FAO Governing Bodies, as well as by the 75th session of the UN General Assembly, the year 2023 has been designated as the ‘International Year of Millets’.
Director General School Education in Uttar Pradesh Vijay Kiran Anand said, “We will soon have a meeting with Union government officials regarding the introduction of millets in mid-day meals.”
The Mid Day Meal Authority of Uttar Pradesh is responsible for providing mid-day meals to government and aided schools from grades 1 to 8. They have proposed to the Union government that a millet-based meal should be served to students in 1.42 lakh schools across the state.
Under the proposed plan, students receiving mid-day meals will be offered either chapatis or khichdi made from bajra, along with a serving of either vegetables or moong dal.
To implement the proposal, the Mid Day Meal Authority would need to obtain around 62,000 metric tonnes of millet. At present, children are served wheat or rice-based meals along with vegetables or protein six days a week.
The mid-day meal program in Uttar Pradesh is set to include millets, as announced by the state’s Agriculture Minister, Surya Pratap Shahi, in a recent statement.
In addition, the state government has submitted a proposal to the Food Corporation of India (FCI) requesting the provision of millets for the mid-day meal program.
Officials from the education department have stated that if the proposal is approved by the Union government and the required quantity of millets is obtained, the plan will be implemented soon after the summer vacations.
Currently, the budget for mid-day meals in Uttar Pradesh amounts to approximately INR 3,000 crore, with 60% of the cost being borne by the Union government and the remaining 40% by the state government.
Experts suggest that millets are a more nutritious food option than wheat or rice, as they are rich in essential nutrients and compounds.
Poornima Kapoor, a Lucknow-based Dietician, said, “Millets are currently not a food option in our homes. So, it will be a challenge to introduce millets as a meal for children in schools, especially because of their different taste and texture.”
In light of this, the state government has assigned teachers with the responsibility of raising awareness among students regarding the advantages of consuming millets.
“Teachers have been suggested to undertake several interactive activities to make students aware of the benefits of millets. This will certainly increase the acceptability of the grains among them,” an education department official said.
The Uttar Pradesh government has declared that it will allocate over INR 110 crore towards promoting the cultivation and consumption of millets in the state this year.
“The programme to promote the production and consumption of millets in the state will be run till 2027. Introduction of millets in mid-day meals is also part of this effort,” said Jagdish Kumar, the Joint Director of Agriculture (planning).
Agriculture department statistics indicate that in 53 out of the 75 districts in Uttar Pradesh, the state produces roughly 19.5 lakh metric tonnes of millets.
Rajneesh Raman, Swarup Bose & Arbind Jain formed Celcius Logistics with the goal of enhancing cold-chain infrastructure in India
In November 2020, at the peak of the pandemic, Swarup Bose, Rajneesh Raman, and Arbind Jain formed Celcius Logistics, a company with the goal of enhancing cold-chain infrastructure in India. Since its inception, Celcius Logistics has achieved numerous milestones, the most recent being its successful Series A funding round led by IvyCap Ventures, which raised INR 100 crore. Additionally, Celcius Logistics has established a robust clientele, including prominent companies such as Zepto, Zomato, Maersk, Prabhat Dairy, Baskin Robbins, Vadilal, Domino’s, Keventers, and Godrej Agro, among others.
Currently, the company is exploring opportunities to expand its business.
Swarup Bose, Founder and CEO, Celcius said, “Having raised more funds, we aim to further expand our operations and build a seamless, and truly unbroken cold supply chain, ensuring food security for all.”
The company’s plan is to broaden its current segments, which include hyperlocal deliveries, to also encompass last mile deliveries.
To date, Celcius Logistics has transported more than 125,000 tons of perishable cargo for various sectors such as dairy, fresh agricultural produce, pharma, fruits, seafood, and vaccines, among others, across more than 350 cities throughout India.
Building a thriving cold-chain solution:
Undoubtedly, the cold-chain logistics sector remains a challenging industry to navigate. In India, the system is plagued with several inefficiencies and is responsible for a significant amount of food waste even today.
Celcius Logistics introduced its intelligent last mile delivery platform in August 2022, which aims to tackle the most pressing challenges in India’s delicate cold supply chain. The company has also collaborated with automotive manufacturers and vehicle owners to establish a network of refrigerated vehicles, integrated with its Inventory Management System (IMS).
Celcius Logistics’ IMS is tailored to cater to the unique requirements of the cold supply chain. Similar to a standard inventory management system, it incorporates temperature management, humidity management, and shelf life management features to ensure the safe transportation of perishable goods.
At present, Celcius Logistics’ last mile service has grown to encompass more than 200 partner vehicles across 11 cities, catering to dark stores, retail outlets, D2C (direct to consumer) deliveries, and various sectors, including e-commerce, pharma, frozen commodities, fresh produce, and other perishable industries.
Celcius Logistics launched its latest hyperlocal delivery service in October 2022 with a focus on implementing technology-driven solutions to mitigate the significant wastage of perishables during transit caused by cold chain malpractices and inefficiencies. The service guarantees speed, quality, and agility in the transportation of goods ranging from 500 gms to 50 kg, utilizing both bike riders and larger reefer trucks for more massive volumes.
After testing the service in Kolkata, Celcius Logistics expanded its hyperlocal delivery service to several other cities, including Delhi, Mumbai, Bengaluru, Hyderabad, and Pune, with a team of over 100 riders.
Celcius Logistics has also acquired distribution contracts from cloud kitchen clients, such as Zomato, for its hyperlocal delivery platform.
Building out the vision:
According to the Mumbai-based startup, it has achieved a 20-fold growth rate in the last year alone.
“We are just about touching 100 Cr ARR in the topline and aiming to grow at 3X and achieve the target of 300 Cr ARR by next year,” says Bose, adding that its existing verticals will help it achieve this scale.
Celcius Logistics’ technology-driven last-mile delivery service emphasizes the consolidation of small reefer vehicles and utilizes the company’s distinctive Vahaan Vikas Yojana to introduce new assets to the sector, providing opportunities for smaller transporters throughout India.
“With the Vahan Vikas Yojana Scheme, we aim to build a reefer trucks network, as part of our larger mission to build an unbroken cold supply chain in the country,” he adds.
Vahaan Vikas Yojana is a corporate program that supports new entrants, including asset owners for transport or warehousing, in entering the cold supply chain sector. This initiative facilitates rapid entry into new markets.
Celcius Logistics has established a robust network to ensure ongoing business for its Vahaan Vikas program, with more than 25 direct annual contracts with companies and over 107 cold storage facilities.
Celcius Logistics has partnered with several major original equipment manufacturers (OEMs) such as Ashok Leyland, Tata Motors, and Mahindra at a national level to provide an assured and exclusive competitive rate over the maximum retail price (MRP), further supporting this initiative.
Celcius Logistics’ Vahan Vikas Samriddhi program financially supports aspiring regional entrepreneurs in the transportation sector.
Vahan Vikas Samriddhi, an extension of Vahan Vikas Yojana, allows businesses to register on the platform and upload their KYC credentials. STFC then assists them with funds, while Celcius streamlines the process of securing RTO-registered vehicles based on their requirements.
The startup has expanded its operations beyond India’s borders to facilitate the import and export of products such as exotic fruits and seafood from countries like Nepal and Afghanistan, which are then distributed to India and vice versa.
“So it’s still at a very nascent stage,” says Bose, adding that this feature is still under progress.
“Our goal is to work towards a sustainable future, by taking steps to reduce the wastage of perishables through innovative tech solutions and create a meaningful impact on the ecosystem,” Swarup says.
The Uttarakhand tax department has generated an impressive sum of INR 2,648.1 crores in sales tax/VAT on liquor over the course of 22 years, beginning from the fiscal year 2001-02 up until 2022-23, as per recent data obtained by RTI activist Nadeem Uddin. This substantial revenue was solely derived from the sale of liquor within the state.
In response to a request made by Nadeem for information on the amount of tax revenue collected on liquor across the state, the public information officer Deepak Brijwal, currently posted as the Deputy Commissioner at state tax headquarters in Dehradun, disclosed that the data illustrates a steady increase in the tax revenue collected on liquor.
As per the data, the tax revenue collected from the sale of liquor in the state has shown a consistent upward trend, with the fiscal year 2022-23 recording the highest revenue collection to date.
As an advocate by profession, Nadeem stated that the tax revenue generated from liquor sales in the fiscal year 2022-23 amounted to INR 361.05 crores, which is around 22 times higher than the collection of INR 15.90 crores in 2001-02. Additionally, despite the challenges posed by the Covid-19 pandemic, the tax revenue for the fiscal year 2020-21 was Rs 39 crores more than the previous year.
Moreover, the tax revenue for the fiscal year 2021-22 stood at INR 334.43 crores, and in the initial 10 months of the following fiscal year 2022-23, the tax collected on liquor sales has already surpassed the total amount collected in the previous year by INR 15 crores.
Remy Cointreau SA, a French spirits manufacturer, stated on Friday that it predicts sales to stay unchanged in the 2023-2024 financial year, with weak demand for cognac persisting in the United States during the first half.
According to the producer of Remy Martin cognac and Cointreau liquor, group sales are expected to experience a “significant decline” during the six months ending on September 30th. This is due to a sharp drop in sales in the United States and difficult comparisons.
The company stated that a rebound is expected in the second half of the year, mainly due to a sharp rise in sales in the United States, beginning in the third quarter. In a statement, Remy Cointreau also confirmed its forecast for robust organic growth in current operating profit for the 2022-2023 fiscal year, which ended on March 31st, as it reported sales growth higher than anticipated.
The company’s group sales for the period amounted to 1.54 billion euros ($1.70 billion), showing an organic increase of 10.1%. This slightly exceeded the company’s compiled consensus of 9.9% growth. Business in China has shown a significant recovery since February, following the lifting of Covid restrictions.
Reliance Consumer Products (RCPL) has recently forged a strategic partnership with Ceylon Beverage International, a major player in Sri Lanka’s beverage can and filling industry. This collaboration will entail the co-packing and manufacturing of RCPL’s Campa soft drinks cans, as disclosed by knowledgeable executives. Notably, Ceylon Beverage International is promoted by former Cricketer Muthiah Muralitharan, adding an exciting dimension to the partnership.
A co-packing agreement has been established between Ceylon Beverage International and the Campa soft drinks portfolio in India. Although the co-packing arrangement has been finalized, Ceylon Beverage International is currently in the process of formalizing a deal to establish manufacturing facilities in India for the production of Campa’s soft drinks.
As per the executives, Reliance Consumer Products is expected to obtain distribution rights for a few of Ceylon Beverage International’s brands in India as a component of the partnership.
According to details available on the company website, the Ceylon Beverages plant is equipped with the ability to fill 300 million beverage cans per year and has established partnerships with international, national, and regional companies.
“While Reliance is currently importing the cans of Campa from Sri Lanka, Ceylon Beverage International plans to also set up manufacturing units in India for RCPL,” one of the executives said.
“Additionally, RCPL may also get distribution rights for some of Ceylon Beverages’ brands in India as part of the partnership,” he added.
Emails seeking comments from the offices of both Reliance Consumer Products and Ceylon Beverage International have gone unanswered as of the Sunday press deadline.
For Campa, this is its inaugural large-scale manufacturing collaboration in India for cans.
According to its website, Ceylon Beverages was founded in 2020 as a beverage processing and filling firm that provides cans to beverage businesses in Sri Lanka and around the world. The firm collaborates with companies that produce mineral water, energy drinks, soft drinks, hot-fill juices, and flavored milk in cans, with a production capacity of over 48,000 cans and 34,000 bottles per hour.
Following his record-breaking career as a spin bowler, Muthiah Muralitharan is currently serving as a coach. Additionally, a biopic about his life is set to be released in the near future.
Reliance Consumer Products (RCPL), which is the FMCG subsidiary of Reliance Retail Ventures, is expanding its reach by partnering with small and mid-sized distributors. The company’s goal is to enhance the national presence of Campa, thereby increasing competition with industry giants Coca-Cola and PepsiCo.
Last year, Reliance Retail acquired Campa from the Pure Drinks group for an estimated INR 22 crore.
In January of this year, Reliance Retail also purchased a 50% stake in Sosyo Hajoori Beverages, a Gujarat-based company, along with its key beverage product, Sosyo. Apart from Sosyo, Hajoori has other brands such as Kashmira, Lemee, Ginlim, Runner, and Opener. Sosyo is a prominent player in the Gujarat region.
According to insiders, the bankers in charge of managing the sale of Subway are offering a $5 billion acquisition financing scheme to private equity firms competing for the sandwich chain. This move is aimed at tackling the difficult climate for leveraged buyouts and achieving Subway’s desired price tag of over $10 billion.
After Subway declared its intent to pursue a sale in February, interest rates have been steadily climbing and concerns regarding a potential economic downturn have intensified. Consequently, buyout firms looking to close deals are finding it harder to obtain debt financing at an affordable cost. As a result, private equity companies are offering less money for the acquisition of businesses.
According to insiders, offers for Subway have fallen within the $8.5 billion to $10 billion range. JPMorgan Chase & Co, Subway’s financial advisor, has proposed a $5 billion debt financing package in the hopes of demonstrating to buyout firms that they can obtain sufficient funds to create an appealing deal even with a valuation exceeding $10 billion.
As per insiders, the debt financing for Subway comprises a blend of loans and bonds, and its magnitude is comparable to 6.75 times Subway’s earnings before interest, taxes, depreciation, and amortization for a 12-month period. This figure is approximately $750 million.
Sources suggest that the recently proposed financing for Subway could be a transitory measure. This is because a more cost-effective alternative for a private equity buyer would be to finance the acquisition through a whole business securitization (WBS) in the long run. Such an approach would involve borrowing against the royalties generated by the restaurant franchises, which would serve as collateral.
The WBS financing option would require a thorough store-by-store analysis by rating agencies, which typically takes more than a year to complete. Therefore, in order to acquire Subway, bidders would have to either rely on JPMorgan’s suggested debt package or arrange for their own financing. Following the acquisition, the buyers could then refinance the deal through a WBS scheme later on.
Sources state that Barclays Plc, a leading participant in the whole business securitization (WBS) financing arena, is one of the banks currently in negotiations concerning long-term financing for the Subway acquisition.
Subway, headquartered in Milford, Connecticut, has been overhauling its operations to address issues such as outdated decor and discounted $5 foot-long sandwiches, which reduced franchisees’ profitability. In 2021, the company revamped its menu and launched an eye-catching marketing campaign, as part of its turnaround strategy, which has led to increased sales. According to insiders, JPMorgan’s financing package includes a preferred equity component that carries an interest rate of approximately 15%, but this is a pricier option that some private equity firms may choose to avoid. Three sources added this information.
It is worth noting that Subway is permitting bidders to employ any financing avenue they desire, provided they can demonstrate that they can secure committed financing.
According to an insider, over 10 private-equity firms submitted their second-round bids for Subway last week, and the company has eliminated low offers while narrowing the field of final bidders. Bain Capital, TPG Inc, Advent International Corp, TDR Capital, Goldman Sachs Group Inc’s buyout arm, and Roark Capital are among the private-equity firms participating in the auction, as per sources.
Insiders indicate that Subway will soon enable bidders to collaborate before submitting their final proposals. Additionally, sources claim that Bain, TPG, and Advent have already engaged in talks about forming a team for this purpose.
As the details of the sale process are confidential, the sources have requested anonymity. Bain, TPG, and Advent have declined to comment, whereas TDR and Roark have yet to respond to requests for comments. Subway, JPMorgan, Goldman Sachs, and Barclays have also declined to comment.
Restaurant renovations:
The company was founded in 1965 as “Pete’s Super Submarines” in Bridgeport, Connecticut, by 17-year-old Fred DeLuca and family friend Peter Buck. Since the opening of its first restaurant, the company has been owned by the founding families.
Subway, with almost 37,000 locations worldwide, is shifting its focus from relying on franchisees who operate only one or two locations to consolidating its locations under fewer, larger, and well-capitalized franchisees.
Earlier this month, Subway announced that its global comparable sales for the first quarter were 12.1% higher and guest visits had increased, partly due to restaurant renovations. However, Subway faces stiff competition from rivals like Firehouse Subs, Jersey Mike’s Subs, Jimmy John’s, and Potbelly Corp.
TPG and Bain were part of a consortium that owned Burger King during John Chidsey’s tenure as CEO of the fast-food chain. Chidsey is currently CEO of Subway. Meanwhile, Advent has invested in restaurant chains like Bojangles and cafe operator First Watch. TDR Capital operates grocery retailer ASDA and gas station conglomerate EG Group.
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