Amazon.com has said it has sent a legal notice to a promoter of Future Group, alleging the Indian merchant breached the provisions of its contract by signing a deal with Reliance Industries.
The online retail giant last year acquired a 49% stake in Future Coupons, the promoter entity which owns a 7.3% interest in Future Retail, the operator of over 1,500 stores in India including supermarket Big Bazaar.
Amazon’s investment at Future Group came with contractual rights which include a right of first refusal and a non-compete-like pact, a source told ET Now, which reported the information.
The e-commerce company, in its lawful note, mentioned a contract agreement that comprised “a restricted list” of companies Future was not assumed to enter prices with, ET Now stated.
An Amazon spokesperson confirmed the company had begun the proceedings.
Amazon, Reliance and Walmart Inc’s Flipkart are in a struggle to gain market share in India, where tens of thousands of middle class customers are newly adopting online purchases of meals and supermarkets due to the COVID-19 pandemic.
Reliance said in August it would get the wholesale and retail company in addition to the logistics and warehousing work of Future in a deal valued at $3.38 billion.
The oil-to-telecoms group, whose retail operation already runs close to 12,000 stores, is expanding its so-called fresh trade venture, which ties neighbourhood stores to Reliance for online deliveries of groceries, apparel and electronic equipment in a space now dominated by Flipkart and Amazon’s Indian arm.
Future Group was not immediately available for comment. Reliance declined to comment.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Nivedita Balu and Anyati Bera in Bengaluru. Editing by Ramakrishnan M, Aditya Soni.
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