With talks between Maharasthra Government and German retail giant Metro almost in the “final stages,” Mumbai is all set to get its first Metro store in December in the eastern suburb of Bhandup even as the fight between Big Retail and the strident traders’ lobby appears to be getting worse.
As state government officials told media that the threat of protests by traders to entry of organized retail and the German retailer has not perturbed them and they are going ahead with the plans of allowing Metro to set up shop.
Metro will be using the same cash-and-carry model as it did in Bangalore in 2003 thus do away with middlemen and so offering huge savings on a majority of 18,000 items that would be put up on sale.
The plans are likely to be finalized just ahead of the visit of German Chancellor Angela Merkel to this country beginning Monday.
The entry of Metro coincides with the Maharashtra government’s long-pending decision to amend the Agriculture Produce Marketing Committee Act, which prohibited both farmers from selling their produce directly in the open market as well retailers from buying at the APMC market yards.
This is likely to make more organised retailers to source directly from farmers in the state which traders believe would put them at the risk of losing their livelihood.
The Metro store would be spread over 100,000 sq ft, plus 30,000 sq ft of parking space.
Since foreign retailers are not allowed to sell directly to individual buyers under the cash-and-carry format, ironically, Metro will target wholesalers and other traders who buy in bulk, the very same constituency that is now protesting against its entry.
“They claim to provide better prices to farmers. But we know better,” said Grain, Rice and Oil Merchants Associations (GROMA) president Sharad Maru. Two weeks ago, nearly 10,000 traders and wholesalers converged in Mumbai’s Azad Maidan to protest against the entry of Big Retail. The traders had threatened to launch a nation-wide agitation and disrupt the organised retail business across the country from January next year.
The traders had three specific demands: that the model APMC Act of 2001 be scrapped, no foreign direct investment in the retail sector by multinational corporations and a complete withdrawal of all cash-and-carry licences. The protesters had specifically decided to resort to violence against the existing organised retail chains, including Metro.
Officials said efforts were on to sell nine centres to Metro. “We have shortlisted nine places across the state that are ideal for large establishments such as Metro. While discussions are still on, so far only the Mumbai plan is confirmed,“ an official said.
At present, Metro runs three stores in Bangalore and Hyderabad. Set up in Germany in 1964 Metro Cash and Carry today has 584 wholesale centers in 29 countries and is among the 50 largest companies world-wide listed by Fortune magazine. It commenced its Indian operations in 2003 with two modern wholesale centers in Bangalore and one later at Hyderabad. After Mumbai it has plans for Kolkata and Punjab, company sources said.