World’s third largest retailer, UK-based Tesco Plc, to set up its first cash-and-carry format store in India have hit a roadblock with the Karnataka Government. The government refusing to issue the company license for sales in the state of food products, including vegetables.
“We are still evaluating the situation but it is unlikely that we will start our first store in Karnataka,” says Leonie Morris, Director, Corporate Affairs, Tesco India.
While no “finite decision” has been made so far because of the rapidly changing situation in the State, the company might now look at setting its first cash and carry format store in other States.
“We are investigating our other options, which could include Maharashtra,” Morris said.
She explained that one of Tesco’s core business and strength was based on selling agriculture produce including grains and vegetables to restaurants, hotels and other such establishments and hence it did not want to move away from such a model. “We, however, want to make it clear that we are very much committed to long-term relationship in India,” she added.
Tesco has been successful in exporting food as well as non-food products from India. It exported over £270 million worth of such products in 2010 and expects the share of food products to increase this calendar year. It expects to export 15 per cent more of such products this year.
Tesco also has an arrangement with Tata Group’s Trent in India and supplies products on a wholesale basis to Star Bazaar retail outlets across the country