The Hindu : New Delhi News : Hoarding, wastage at big stores driving up prices

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Monday, May 12, 2008
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New Delhi

Hoarding, wastage at big stores driving up prices

Gaurav Vivek Bhatnagar

Retailers dealing in fruit, vegetables sell at varying prices

Photo: Shiv Kumar Pushpakar

A Mother Dairy outlet.

NEW DELHI: Bulk purchases, maintenance of large inventories and inability to minimise wastages due to absence of a reducing price policy by mega stores and retail chains engaged in the sale of fruit and vegetables have contributed significantly to the rise in their prices and its consequent impact on inflation.

In Delhi and nearby areas, people visiting stores of Mother Dairy Fruit and Vegetable Private Limited or those of retail stores like Reliance Fresh, Subhiksha and the like always find a lot of stale fruit and vegetables at their outlets. Since these stores do not follow a policy of selling vegetables and fruits at varying rates according to their freshness, they are unable to sell their produce after a point as it loses freshness and value rapidly. On the other hand, small retailers selling fruit and vegetables by the roadside bring down their prices by evening. This also enables them, more often than not, to sell all their stock before returning home, making more economic sense.

Rashid Khan, who sells mangoes at the Saturday weekly market in Patparganj, sees nothing wrong in this practice. “This ensures that while we are able to get better rates for the mangoes during daytime when better off people are able to take the best of the items, others are able to procure the fruit at much lower rates in the evening.”

While ensuring that the seller is able to recover the cost on even the lower grade items, such sales also curb wastage of farm produce. But in the case of the big players, it is a different story. A franchisee of Mother Dairy in Indirapuram, Ghaziabad, said: “The company does not take back old produce and it specifies that goods are to be sold at specified rates. Also, we are unable to sell for less as that would encourage bargaining and haggling which we do not want. So if there is a bulk buyer for stale items, we sell whatever we can. Otherwise it all turns into garbage. And mind you between 50 and 60 per cent of the fruit and vegetables remain unsold.”

A Subhiksha store employee at Acharya Niketan in East Delhi said the company takes back all the unsold fruits and vegetables and the stores cannot sell the stale produce at lower rates to anyone. Such being the case, the wastages entailed by the major stores are huge. In fact, in February 2007, the share of procurement by these big players in the wholesale fruit and vegetable markets of Delhi had gone up to nearly 25 per cent. Mother Dairy alone handles nearly 120,000 metric tonnes of fresh produce annually at its processing facilities in Delhi.

Confederation of All India Traders secretary general Praveen Khandelwal said the big retail groups were also primarily responsible for the rise in prices of fruit and vegetables. “They are the biggest hoarders of essential commodities in the country. They also procure directly from the producers and maintain huge inventories in their warehouses, at times for up to three months. This is nothing but hoarding that drives up prices.”

To stress the point, Mr. Khandelwal said ever since the stores of these big players started growing from 2005, prices of all food articles have shot up significantly.

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