Ikea hits meatballs snag in India
Swedish flatpacked furniture giant hits snack snags despite planned massive investment
Ikea's Swedish meatballs, gulped down in their thousands each weekend in store cafes around the world, are the subject of a bureaucratic tug-of-war in India that could hit local consumers' hopes of sampling the joys of flatpacked furniture soon.
The retailer plans to invest about £1.25 billion (HK$15.6 billion) in India to exploit demand from the growing urban middle class. Though growth has slowed recently, the country's economy is still set to expand by between 5 and 8 per cent this year.
Ten Ikea stores are planned over a decade, to be followed by 15 more, as part of a bigger push to enter emerging markets.
However, last month officials told Ikea it was only allowed to sell furniture products, and that selling food and drink would infringe on regulations.
The government had presented Ikea's planned entry into India as a sign that foreign investors still had confidence in the country despite a series of corruption scandals and political protests over expansion by foreign firms.
More than half of India's 1.2 billion inhabitants are younger than 30, and the number of middle-class households is expected to quadruple to 150 million in the next 20 years.