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Hyderabad , March 24

STUDIES have put the potential for value-added foods in the country at Rs 2,25,000 crore by 2007.

Evolving consumption habits are expected to drive demand for mass value-added products. But there are many roadblocks in the way, according to Mr G.V. Krishnan, General Manager of FoodWorld (Hyderabad).

In his presentation on `Changing dimensions of Indian food retail industry and the business opportunities for French companies in India' at a seminar here today, he said the Land Ceiling Act prevented the growth of commercial agriculture in the country.

The seminar-cum-business meeting was organised by the Federation of Andhra Pradesh Chamber of Commerce and Industry (Fapcci) and Federation of Indian Chambers of Commerce and Industry (FICCI) to mark the visit by a French delegation.

Restriction on maximum retail price was another area that curtailed the growth of retailing in the country. World-over retailers retained the freedom to fix price, he said.

He felt that more and more disintermediation would reduce source cost. "There is a scope to reduce cost and waste," he said.

"Retailers must learn to manage front-end sales with back-end sourcing," Mr Krishnan said.

He pointed out that cost-addition should not be mistaken for value-addition. "Value-addition should enhance convenience of the customers," he said.

Yet, the changing profile of the population brings cheers to the retailing industry. "Population is getting younger. There is more acceptance for new concepts. The number of nuclear families is growing by the day. There's more money to be spent," Mr Krishnan said.

These factors triggered growth in the organised retailing, he added.

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