Reliance Retail, owned by Mukesh Ambani has decided not to go ahead with its chicken restaurant business. The venture, which was supposed to see the light of day soon, has been shut down and the retail arm of Reliance Industries Limited (RIL) has decided to exit the venture.
RIL had earlier picked up a 45% equity stake in Two Sisters Foods India (TSFI), which belongs to 2 Sisters Food Group (2SFG). 2SFG, the third largest food company in the UK, supplies poultry, red meat, fish, and bakery and chilled/frozen products to the retail, food service and food manufacturing sectors. RIL was also planning to set up quick service restaurants (QSRs) named ‘Chicken came First’.RIL has also decided to annul the joint venture with 2SFG and decided to write-off the Rs. 50 crore investments made in the same venture.
Reliance Retail had also planned to set up ‘Delight,’ a chain for non-vegetarian products with presence in 11 states and 25 cities with over 100 stores. An exclusive supply chain was also set-up to serve its products and keep it segregated from other products in due consideration of people’s beliefs. The company initially had plans to scale up Delight stores to over 1,000 as non-veg products deliver a margin of over 20-25% compared to 10-15% margins in food and grocery retailing.
However, the industry giant decided not to go ahead with it. “Despite this sensitive balance of availability and convenience, it was felt that certain sections of customers were still hesitant to shop at our other stores. Reliance Retail has therefore decided to focus on vegetarian offerings only, within its retail portfolio,” said a source.
This move to not proceed with the business, according to many analysts can be closely related to the global trend of ethical investing where investments are only made in areas or in companies that fall in line with the standards to ethics and morality of a particular demographic. There are lot of morals and ethics involved in the decision. According to a United Nations report, animal slaughter houses contribute as much carbon dioxide into the atmosphere as automobiles in a calendar year. This move by Mukesh Ambani is seen by many as a positive step and will contribute to reduced emissions.
Socially responsible investment has been growing as an area of investment for corporates during the last two decades. An effort is made to promote and support companies who practice environmental stewardship, social justice, social development, human rights, gender equality, good corporate governance and diversity among others. Take for example Mukesh Ambani owned Reliance Foundation – which is strives to create a better present and provide a sustainable future for vulnerable sections of India’s downtrodden society. In a short span of barely three years, Reliance Foundation has touched the lives of more than 1,000,000 Indians in over 3,000 villages and various urban locations in more than 11 states. This kind of social investing will continue to grow in India. While there is a lack of information about where to invest and what sort of support facilities to provide to the poor, the overall trend will change and social investments will rise sharply in the years to come.