JHS Svendgaard Laboratories, one of leading contract manufacturers is reportedly contemplating to file a legal action against Procter & Gamble India for not renewing a contract to make Tide detergent. The company has hired Khaitan & Company to take legal action for non-renewal of contract since over 70% of its business comes from P&G.
JHS Svendgaard had set up a plant in Kalaamb, Himachal Pradesh in 2010 to exclusively make Tide detergent and it would lose around Rs 200 crore if the contract isn’t renewed. JHS claims that it has borrowed heavily, primarily on many assurances of P&G, both verbal and written to invest in their three businesses while P&G denied this version of events asserting that they have neither communicated any such demand, nor does the JHS-P&G contract make any such stipulation.
On the other hand, the world’s largest maker of consumer non-durables fears that JHS may not be able to meet contractual obligations due to which it does not intends to renew the contract that expires next month.
