The Hindu : Trade, industry oppose Metro venture

Online edition of India's National Newspaper
Sunday, Nov 16, 2003

Southern States

Southern States - Karnataka-Bangalore

Trade, industry oppose Metro venture

By B.S. Ramesh and Nagesh Prabhu

and Nagesh Prabhu

BANGALORE Nov. 15. Barely three days after Metro Cash and Carry opened its second outlet in Bangalore, trade and industry organisations in the State have decided to join forces to oppose it even as the State Government has thrown its weight behind the German multinational which plans to source produce directly from farmers.

While the opening of the first Metro outlet in Yeshwantpur evoked widespread opposition from traders attached to the Agriculture Produce Marketing Committee (APMC), the second outlet on Kanakapura Road has crystallised opposition to it with the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) and the Karnataka Small-scale Industries' Association (KASSIA) coming together to oppose the company.

Both FKCCI and KASSIA see a threat from Metro to local traders. While J.R. Bangera, co-Chairman, FKCCI Action Committee on Metro, says retail and wholesale trading by Metro will destroy traditional retailing in the State, C.R. Janardhana, KASSIA President, maintains that it will crush local enterprise.

Mr. Bangera says Metro, if it is allowed to continue its operations, will displace nearly 25,000 workers employed in the APMC yard. He alleges that pressure has been brought to bear on the State Government to amend the APMC Act to enable Metro to deal with agricultural commodities.

This view is contested by the Minister for Urban Development, D.K. Shivakumar, who says farmers will benefit in the long run as they will get better prices.

Wondering why industrial associations are worried over the setting up of two Metro outlets, Mr. Shivakumar told The Hindu on Saturday that a few farmers had already entered into an agreement with Metro to sell their products to the store. The farmers, he says, will get higher prices.

This view, however, is not taken kindly to by KASSIA, which feels threatened by the multinational's presence. Mr. Janardhana says KASSIA and FKCCI have jointly decided to take on Metro. They first plan to meet the Chief Minister, S.M. Krishna, and apprise him of the facts. When asked what they will do if the meeting does not yield any result, Mr. Janardhana says they will "take to the streets".

On its part, the FKCCI has decided to submit a detailed memorandum to the Foreign Investment Promotion Board (FIPB) as it feels that Metro has been misleading the public through advertisements and violating the rules by trading in agricultural commodities.

Clarifying the role of Metro, its Managing Director, Harish Bahadur, told The Hindu that the company would identify a certain place in rural areas where groups of 20 farmers would be asked to bring their produce.

At present, 20 per cent to 30 per cent of vegetables and fruit are being wasted due to bad handling and equally bad packaging. "We will eliminate such wastage and provide an ideal platform for farmers to sell their produce at higher prices," Mr. Bahadur says.

According to him, all apprehensions about Metro are unfounded as the company is here to help farmers and consumers and not ruin them. Moreover, the daily wholesale business in Bangalore is put at Rs. 0.65 crore and Metro alone cannot monopolise it, he says.

The assurances of the Government and Metro are, however, cold comfort for those at the APMC Yard and other small traders. Their refrain is that they are too small and their operations too limited to compete with Metro or any other similar multinational for that matter.

Traders on Saturday held a demonstration in front of the Chief Minister's residence against Metro and said its continued operations signalled their "death warrant".

GMCI stand

The Greater Mysore Chamber of Commerce and Industry (GMCI) has taken a more pragmatic and practical stand on the issue.

The GMCI Vice-President, Chandrashekar, said that "the problems of existing players and new entrants should be addressed and irritants removed so that both can co-exist. What matters ultimately is consumer benefits borne out of lower costs, irrespective of the player."

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