French retail group Auchan is breaking ties with Max Hypermarkets in India after two years.

In August 2012, Groupe Auchan offered the right to its brand and access to its know-how to benefit Max Hypermarkets, both for existing and future stores, with a license agreement covering the whole of India.

In September that year, Indian government announced measures which permitted, under certain conditions, direct foreign investments in multi-brand retail.

Nevertheless, the liberalisation did not apply to the full Indian sub-continent, thus excluding some of the hypermarkets already under the Auchan license.

Groupe Auchan and Max Hypermarkets continued deep into 2013 to look into the possibility of creating a joint venture to facilitate Groupe Auchan investment in India, which could comply with Indian FDI regulations. Despite their best efforts, the two could not facilitate the plan.

By common agreement, the 12 Max Hypermarkets stores will no longer operate under the Auchan banner from January 2015 at the latest.

However, Groupe Auchan remains committed to long term investment in a market of 1.2 billion. The Indian-based team continue to explore ways to develop the hypermarket business model and the Auchan brand, especially in areas where foreign investments are liberalised.