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Rediff.com  » Business » Bingo! It's Frito Lay's loss, ITC's gain

Bingo! It's Frito Lay's loss, ITC's gain

June 07, 2007 17:10 IST

As organised retailers try to squeeze margins, Kishore Biyani-promoted Future Group has replaced PepsiCo's Frito Lay snacks with ITC's Bingo at its Big Bazaar and Food Bazaar stores.

"Discussion are on at the moment but Frito Lay products are out of the 57 Big Bazaar and 70 Food Bazaar outlets," a Future Group official said.

In addition, Future Group has placed its own private label 'Tasty Treat' in its outlets instead of Frito Lay, the official added.

While the official declined to comment on the reasons for replacement, industry sources said PepsiCo India Holdings had asked for a reduction in margins given to the retailer.

"PepsiCo wanted margins to be cut from 25 per cent to 20 per cent, which the Future Group did not agree and hence made Bingo to become the best choice," the sources added.

PepsiCo India officials could not be contacted for comments. A recent entrant in the ready-to-eat wafer segment, ITC's Bingo took the competition to Frito Lays not only by striking at the small shops not but is also offering an estimated margin of 4-5 per cent higher than Frito Lay.

After hitting the market in March this year, ITC launched an advertising blitzkrieg across the country as it tried to compete with market leader Frito Lay.

With heavy dose of advertising in this year's cricket World Cup, Bingo caught the attention of customers. Now, it is trying to replace competitors from the shelves of large format retailers as well.

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