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Nestle: Caught Excelcia, bowled Dabur?

DABUR India's appeal to the Foreign Investment Promotion Board, requesting the latter to prevent Nestle India from manufacturing or marketing biscuits, places constraints on the expansion of Nestle's product portfolio. This could act as a dampener on sen timent towards the Nestle India stock in the near term. Nestle had been contemplating the launch of biscuits under the Milkmaid brand name. Dabur sees this as a competitive threat to its existing joint venture with Nestle under the umbrella of Excelcia F oods. A more broadbased product portfolio may be crucial to Nestle at a time when its coffee export business has been hit by adverse international markets and also to neutralise volatility on this count over a period of time. The Dabur objections may sty mie the pace of progress in this regard and also impinge on competitiveness of Nestle's foray in the biscuits business. The Nestle stock trades at Rs. 374.