"People in the cash & carry business are
wholesalers. By definition, a wholesaler should sell
in bulk to a retailer, who can then sell in small quantities
to consumers. B2B customers like hotels, restaurants
and canteens are consumers, not retailers, and therefore
cash & carry stores should not be allowed to sell
to them," the association has argued in the PIL.
If a favourable judgement comes, the restriction in
the definition of cash & carry will adversely impact
Bharti-Wal-Mart and Metro who are both looking at institutional
sales, and have identified the B2B segment as a growth
driver. Recently, commerce and industry minister Kamal
Nath also said that India's B2B market alone offers
more opportunities to companies like Wal-Mart than the
retail market in many countries..
The PIL says FAM is not against FDI in wholesale trade,
it's merely contesting the interpretation of cash and
carry. "We are demanding cancellation of licences
granted to wholesalers because they have circumvented
rules to their advantage.".The petitioners have
made a mention of the German chain, Metro, alleging
that the company has violated certain premises on which
it was granted permission to operate in India.
Currently, Metro and the African chain, Shoprite, are
the only foreign players operating in the cash &
carry business. Wal-Mart,'s 50:50 joint venture with
Bharti Enterprises plans to roll out its cash &
carry stores early next year and is betting on institutional
sales to hotels, restaurants and canteens. As foreign
direct investment is allowed only in cash and carry,
it is seen as an interesting business proposition for
global retailers.
Details at
http://economictimes.indiatimes.com
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