If at first you don't succeed....

On Friday, India's government launched another attempt to relax regulations on its retail industry and allow for more foreign investment in the sector. In December, the Indian government had to shelve plans to allow overseas investors to own 51% of multi-brand retailers amid opposition from some states, politicians and local retailers. 

The second attempt at reform includes conditions. States have the power to block the opening of multi-brand stores backed by foreign capital. However, predictably, the announcement was met with criticism, including from within the ruling coalition. Leftist parties have called for a national strike tomorrow in protest at the plans and at other reforms announced last week, including a hike in diesel prices.

Nevertheless, Indian Prime Minister Manmohan Singh, who has faced criticism from overseas at the perceived lack of economic reform in India, called on the country to back the plans and international retailers have welcomed the fresh attempt at reform. "This policy change will allow us to connect directly with the consumer and save them money," the head of Wal-Mart's Indian business said.

Will the reforms stick? Could they again be derailed by opposition? India is an unpredictable market but this morning one leading analyst told just-food he was confident the reforms will be implemented this time around. "What is very important for us to think about is what is in the interest of the country," Deloitte Haskins & Sells partner Anil Tuneja said. "The fact the government has come up with this once again clearly indicates it has been a thought-through process."

Further east, the diplomatic dispute between China and Japan over a group of islands in the East China Sea made headlines worldwide over the weekend. Japan's move to buy some of the islands from a private owner has angered some Chinese, who have protested across the country in recent days. Toyota and Honda reportedly said stores in China were damaged, while electronics firm Canon said it would close three plants. In the retail sector, Seven & I Holdings has said it will close over 200 outlets tomorrow, according to reports.

The dispute between two of the world's three largest economies will be very closely watched by investors. People's Daily, the official newspaper of China's Communist Party, implied China could look at economic sanctions. "Japan is putting its own future at risk. The Japanese economy has long been sluggish, and Japan has always hoped to hitch out of its lost two decades on China's economic bandwagon," it wrote on Saturday.

One Japanese food company that will be monitoring the situation is Itochu Corp. The Japanese conglomerate said last week it was in "advanced negotiations" to buy Dole Food Co.'s global packaged food assets, as well as its fresh produce business in Asia.

Expansion in China looks to be a critical factor in Itochu's interest in the US firm's operations. Itochu owns stakes in Chinese food group Ting Hsin and retailer FamilyMart and those investments could be vehicles to further build Dole's fresh produce business in China. The Japanese firm indicated last week it was confident a deal could be done. It said it expected the acquisition to be finalised by November. Dole, however, insisted it was in talks with "several" other parties.

India and China are likely to be two hot topics at this year's World Retail Congress, which this year will be held in London. just-food will again be bringing you the latest news and views from the event, which starts on Wednesday.

And, to close this week's column: two announcements. First, a reminder that just-food is surveying its readers. Now is your chance to let us know what you think of our service (good or bad) and what you want to see more (or less) of. So, if you have a gripe, want to see more of a certain topic covered, or, hopefully, want to give us the thumbs-up, fill in our survey here.

Secondly, next month, just-food will be at the SIAL exhibition in Paris, the huge, biennial trade show that attracts exhibitors and visitors from around the world.

Ahead of the event, we are running a daily diary of what exhibitors plan to showcase. Our diary gives exhibitors the chance to publicise the new products and services they will launch or highlight at SIAL - and also gives visitors the chance to note the particular products they want to check out. So, exhibitors, send through your product news to foodeditor@aroq.com.

Until next time...

Dean Best
Managing Editor
Web: http://www.just-food.com
Email: editor@just-food.com
Twitter: http://twitter.com/just_food