The Reliance Anil Dhirubhai Ambani Group (ADAG) is planning to float its pharma retail chain business through tie up with a multinational distribution company to claim a pie in the drug distribution market of the country soon. But, there is an air of confusion over the rumour that a section of the All India Organisation of Chemists and Druggists (AIOCD) will support the Reliance in its retail venture.
According to market sources, the pharma retail chain initiative of the Reliance is waiting for the response from an MNC retail chain to start operations nationwide. The foreign company is expected to come up with an announcement in favour of Reliance ADAG.
The move is to take the wholesale and retail associates of the company into confidence along with attracting more pharmaceutical manufacturers into the venture before rolling out operations of the new retail initiative. The company is currently, engaged in talks with major Indian and foreign pharmaceutical manufacturers for marketing tie-ups, according to sources close to the development. The company, which has acquired two small-scale pharma retailers, also plans to pick up more small-scale pharma chains from various parts of the country through tie-ups and acquisitions.
Meanwhile, the alleged move of a faction of AIOCD members to join the pharma retail venture of Reliance ADAG has created confusion in both the sides. According to these allegations, a group of traders under the leadership of Dilip A Mehta, past president of AIOCD and president of Pharmaceutical Wholesaler's Association (PWA) has plans to join the Reliance initiative.
The Maharashtra State Chemists and Druggists Association (MSCDA), the Maharashtra based affiliate of AIOCD, has sent a show cause notice to Dilip Mehta on February 3, 2007, for his comments in favour of Reliance in a television programme. The decision of AIOCD to float a company is being opposed by its own members and factions from states like Karnataka and West Bengal are also planning to join Reliance as part of this development. Sources add that the faction was planning to come out from AIOCD Ltd and to form a new company, which could make joint venture with Reliance ADAG.
An executive committee meeting was held by AIOCD in the end of April 2007 to discuss the issue in detail. "AIOCD is aware of such activities taking place around our new venture. We have issued show cause notice to the concerned persons and are waiting for their reply. Further action will be discussed by the association after going through their explanation," A N Mohan, president, AIOCD told Pharmabiz.
However, denying the allegations of split in the AIOCD to join Reliance ADAG, Dilip Mehta said, there was no such move from any section of the AIOCD. "There is no question of either AIOCD or PWA joining Reliance ADAG. This entire matter is not related to any organisation, but me as an individual. I am in talk with the Reliance venture to have an individual partnership in their retail venture, with my personal capacity, and the talks are at a preliminary stage," Mehta told Pharmabiz. "I will submit my clarification to AIOCD to prove that I have no intention to hamper the interests of the organisation," he added.
The Reliance ADAG management refused to comment on the developments.