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Metro faces fresh retail trade charges

February 05, 2009 11:02 IST

Metro Cash & Carry, German wholesale major, is facing fresh allegations of carrying out retail trade, a charge the company has denied, even as wholesale buyers say they are getting products at 20-30 per cent lower prices.

The wholesaler got its Agricultural Produce Marketing Committee licence renewed recently in West Bengal.

The fresh allegations of carrying out retail trade have come from the Forward Bloc, a constituent of the Left Front government in Bengal, which had been opposing the entry of Metro on this ground.

Forward Bloc-controlled APMC in the state has submitted a report stating the instances of violations of the terms of the Regulated Market Committee licence, said sources. Traders have to purchase articles worth a minimum of Rs 1,000 from the Metro store to keep the household buyers away as per the terms of the licence.

Naren Chatterjee, chairman, APMC, said, "The committee has received such reports. Now, APMC teams will visit Metro Cash & Carry outlet next week to ascertain that. For selling agriculture products at the retail level, a licence from APMC is required but without physical verification, I will not comment."

There have been reports that traders, holding a licence for a particular item, were using it to buy farm products, sources added.

According to a Metro spokesperson, "The store opened in December and it needs around three months to analyse the store and its customers to have a view as how the Kolkata store is doing compared to other stores."

"Metro Cash & Carry wholesale centres are open exclusively for professional business customers. All of them are registered and provided with a customer identification card.

"This means that the company does not sell to household customers. Metro caters to groups of hotels, restaurants, caterers as well as kirana stores and other small retailers by offering a wide assortment of 18,000 articles, comprising food and non-food products," said the wholesaler.

The State Agriculture Marketing Board granted a licence to Metro Cash & Carry in 2005 to trade in APMC commodities.

The licence was subsequently renewed twice in 2006 and 2007 and was valid until March 2008.

However, APMC unilaterally withdrew the licence in June 2007.

In a parallel development then, the construction work for the Metro store was stayed for eight months over a land dispute.

After the stay order was vacated, the company had approached the licensing authority repeatedly for issuance of a fresh APMC licence in November 2007, December 2007, and finally in March 2008.

Earlier, the Forward Bloc had suggested that the minimum bill amount per customer should raised to Rs 5,000.

Wholesalers in Kolkata declined to accept the condition.  Metro sided with them and said the condition was against its business strategy followed in other cities.

Metro outlets in Bangalore and Hyderabad had Rs 1,000 as the minimum bill size, but it was for multi-item sale.

According the company spokesperson, "We do not compete on prices but the feedback we have got so far from our buyers is that our prices and assortment offer a better proposition."

Buyers in Kolkata said they were getting items 20-30 per cent cheaper than the maximum retail price.

For instance, an LG DVD player marked at Rs 3,990 in showrooms was being sold at Rs 2,932 at Metro.

A 500-gm Horlicks pack was priced at Rs 109 against MRP of Rs 121. The 'rohu' fish was priced at Rs 60 per kg at Metro against its going price of Rs 80-90 in the market.

Fresh vegetables were cheaper too.

Representatives of caterer 'Bijoli Grill', the leading sweet shop 'Girish Ghosh & Nakur Nandi' and restaurant 'Bhojohari Manna' said Metro products offered better quality at a price lower than wholesale market prices in the city.

According to Siddharth Bose, the director of restaurant chain 'Bhojohari Manna', "We get cheaper products at Metro so it would be stupid not to buy from here."

"If my cost is less, I can consider reducing prices," said Tapan Barik, proprietor of Bijoli Grill, adding the quality of fish was superior too.

Prashanta Nandi, owner of sweet shop Nakur, said he got steady supply of materials like Hershey's chocolate sauce used in his special sweets.

"Metro provides us as much chocolate sauce as we want and when we want," Nandi said. Nandi aimed to buy milk and sugar from Metro even though his shop in north Kolkata was far away from the store.

Pradipta Mukherjee & Namrata Acharya in Kolkata