| Buddhadeb Bhattacharjee with CII president Y.C. Deveshwar in Calcutta on Friday. Picture by Kishor Roy Chowdhury
Calcutta, Sept. 23: Carrefour, the world’s second-largest supermarket chain after Wal-Mart, is looking to set up base in Calcutta.
The French retail chain, which has overall sales of 90 billion euro and 11,000 stores in 31 countries, is planning to start cash-and-carry operations, which bars it from selling directly to consumers. A cash-and-carry licence requires the company to operate like a wholesaler, selling its products through a number of retailers.
Representatives from Carrefour recently met Chief Minister Buddhadeb Bhattacharjee to discuss their proposal. It could not be ascertained how much Carrefour intended to invest and whether it was looking at other destinations in the country.
Carrefour won’t be the first retailer to use this route to enter the country. Metro AG, the German retailer, has acquired a cash-and-carry licence. It established base in Bangalore in October 2003 with an investment of Rs 180 crore.
Several telecom companies like Nokia and Motorola have also established cash-and-carry operations in the country. Now that the government has raised the limit on foreign direct investment (FDI) in the telecom sector to 74 per cent, they are planning to establish manufacturing bases as well.
Carrefour’s move is significant since it comes at a time when the Manmohan Singh government has started to push hard for a consensus on allowing foreign investment in retailing ' a proposal that the Left is vehemently opposed to. The Left has opposed the idea of allowing retailers like Wal-Mart, Carrefour and Tesco of the UK to establish a presence in India on the ground that it would hurt the local mom-and-pop kirana outlets.
“We will not allow FDI at the retail level. If they (Carrefour) are keen to enter the wholesale market which will benefit the farmers, we are in favour of it,” Bhattacharjee said. Metro has also evinced interest in Calcutta. “We have made our conditions clear to them also,” he said.
“Last week, I had met M.S. Swaminathan (the agricultural scientist who started the green revolution in Punjab back in the sixties) to discuss retailing in the food sector. He had explained that it would benefit the farmers and also the consumers who will be able to buy fresh vegetables. However, the small vegetable sellers will be adversely affected as the small vegetable market will totally collapse,” the chief minister said.
Carrefour has five leading retail formats, including hypermarket, supermarket, convenience stores, cash-and-carry food service and hard discount stores.
Last week, commerce minister Kamal Nath said the government was preparing a paper on FDI in retail that it intended to float for discussion.
In an interview with McKinsey Quarterly last month, Manmohan Singh said he hoped to convince all political parties about the virtues of allowing FDI in retail. “We have to carry conviction with our political colleagues. Over a period of time we can do that,” he had said.