Dear All,
Congratulations!
Our collective efforts to mobilize 42 member parliamentary standing committee on commerce which was studying foreign and domestic investment in retail trade has yielded positive results. Though the parliamentary committee recommendations are not binding on the Government, still its a victory worth celebrating.
best!
Dharmendra Kumar
House panel opposes foreign investment in retail
The committee says allowing cash & carry wholesale in India is nothing but allowing back-door entry of foreign firms into retailing
http://www.livemint.com/2009/06/08185249/House-panel-opposes-foreign-in.html?h=B
New Delhi: A Parliamentary Standing Committee has recommended a blanket ban on foreign investment in retail and has opposed even big domestic corporate entering the sector saying that it will lead to unemployment.
“The committee … recommend that a blanket ban should be imposed on domestic corporate heavy weights and foreign retailers from entering into retail trade in grocery, fruits and vegetables,” it said, adding that restrictions should be put for opening large malls by them for selling other consumer products.
The committee, headed by Murli Manohar Joshi, feels that “opening of foreign direct investment (FDI) in retail trade by allowing single brand foreign firms in India will result in unemployment due to slide-down of indigenous retail traders”.
The 42-member panel in its report on `Foreign and Domestic Investment in Retail Sector´ further said that the government should stop issuing “further licences for “cash and carry either to the transnational retailers or to a combination of transnational retailers and the Indian partner, as it is “mere a camouflage for doing retail trade through back door”.
The government may consider setting up a national commission to study the problems in the retail sector and to evolve policies that would enable it to cope with FDI, the Parliamentary panel said.
According to existing guidelines, FDI is prohibited in retail trading except for single brand retail in which 51% FDI is permitted.
Whereas 100% FDI is permitted under the automatic route in wholesale cash and carry trading.
The committee said allowing cash and carry wholesale in India is nothing but allowing back-door entry of foreign firms into retailing.
“Consumers’ welfare would be sidelined, as the big retail giants by adopting a predatory pricing policy would fix lower price initially, tempting the consumers,” it said adding that after wiping the competition from local retailers, they would be in a monopolistic position and would be able to diktat the retail prices.
It said procurement centres constituted by big corporates for making direct bulk purchases would initially pay attractive prices to farmers and cause gradual extinction of mandis and regulated market yards.
Unorganized retail employs over 40 million people, which accounts for 8% of the total employment.
“…the government should ensure that some in-built policy must be established to relocate or re-employ the people who are dislocated due to opening of big malls in the vicinity of their shops,” the Committee said.
“…there is a need for setting up of a retail regulatory authority to look into the problems and act as a whistle blower in case of anti competitive behaviour and abuse of dominance,” it added.
On the use of agricultural land for shopping malls, the Committee feels that diverting the land may not merely lead to reduction in production or income to farmers, it may affect the social and cultural life of farmers.
“The government should come out with adequate safeguards to prevent diversion of agricultural land for setting up of malls,” it said.
====
One wonders whether a Parliamentary Committee will now comprehensively examine the demerits and lessons of laissez faire export led growth, emerging protectionist tendencies in Western markets, recession in global economy on behalf of Indian Planning Commission, which has been handed over back to the old school of World Bank inspired economists under Montek Singh Ahluwalia.
http://www.guardian.co.uk/business/2008/jul/03/marksspencer.retail1
The Guardian newspaper of UK has reported that the High End Employer Marks and Spencer is now reconsidering its strategy in developed country markets.
So will Marks and Spencer now become a Value Retailer in emerging markets ? What a mishap for the High Flyer falling on Bad Times and burning away cash.
Hawkers’ leaders from around the country met with the Home Minister for Livelihood Protection and Regulation of Street Vending Bill
Hawkers leaders from around the country met the Home Minister, Mr. Shivraj Patil, who has been made the Chairman of Empowered Group of Ministers to draft Livelihood Protection and Regulation of Street Vending Bill and discussed the threats to hawkers.
The hawkers leaders were lead by Medha Patkar, Working President, National Hawkers Federation and Saktiman Ghosh, General Secretary, National Hawkers Federation. The leaders were joined by Mr. Abani Roy, Prominent Parliamentarian, Raju Bhise, President, YUVA, Dharmendra Kumar, Director, India FDI Watch and Cheryl of Socialist Hawkers Union.
The leaders demanded mandatory implementation of the National Policy on Urban Street Vendors by all States and Municipalities and called for decriminalization of street vending by amendment to the Indian Penal Code, Police Act, and all relevant state and Municipal acts. They demanded a complete ban on foreign direct investment in retail and comprehensive regulation of domestic corporations who are hijacking the retail trade of hawkers.
The leaders demanded a complete ban on all corporations selling fruits, vegetables, groceries, and daily use goods. The leaders also demanded social security for hawkers, including pension, maternity, and health benefits.
The Home Minister assured the delegation to incorporate their demands in the proposed draft.
Addressing a press conference later, Medha Patkar accused Mukesh Ambani of being shameless to announce to “double” their profit from Reliance Fresh. Shaktiman Ghosh announced a march to parliament during its winter session to forward hawkers demands.
Hawkers represent one of the largest contingents of the unorganized sector, which constitutes 93% of the workforce and contributes 65% of the country’s GDP.
In Solidarity !
Dharmendra Kumar
Director
India FDI Watch
M-9871179084
Email :
dkfordignity@yahoo.co.uk
dkfordignity@gmail.com
Parliament Standing Committee on Commerce invites suggestions of public on Foreign and Domestic investment in Retail Sector.
The department related parliamentary standing committee on commerce, headed by Dr. Murli Manohar Joshi, M.P., is examining the subject of Foreign and Domestic Investment in Retail Sector.
The committee has already heard some oral evidence and has also undertaken on the spot study visits to some places. The Committee would also like to receive inputs from a wider cross section of stakeholders and the public at large.
Please do submit your views and suggestions to the Committee. You may send your written memoranda (either in English or Hindi) on the above subject to :
Shri Surinder Kumar Watts
Director
Rajya Sabha Secretariat
240, Second Floor
Parliament House Annexe
New Delhi-110001
Tel: 011-23034240
Fax: 011-23013158
You can also email at watts@sansad.nic.in
Those desirous of being heard in person may indicate their willingness in their written suggestions / views.
Note: The last date for submission is 12 July 2008.
( A reference draft is given below. You are welcome to use it for drafting your memorandum )
In Solidarity !
Dharmendra Kumar
Director
India FDI Watch
M-9871179084
Email: dkfordignity@yahoo.co.uk
dkfordignity@gmail.com
======================
Memorandum to the Standing Committee on Commerce on Foreign and domestic investment in retail sector
To,
Shri Surinder Kumar Watts
Director
Rajya Sabha Secretariat
240, Second Floor
Parliament House Annexe
New Delhi-110001
Tel: 011-23034240
Fax: 011-23013158
Email: watts@sansad.nic.in
Sir,
India is a land of retail democracy- hundreds of thousands of weekly haats and bazaars are located across the length and breadth of our country by people’s own self-organizational capacities.
Our streets are bazaars / open markets - lively, vibrant, safe and the source of livelihood for millions.
In a country with large numbers of people, and high levels of poverty, the existing model of retail democracy is the most appropriate in terms of economic viability and ecological sustainability. The huge hype of the entry of corporate retail into India is infact nothing but a HIJACK of our vibrant, well organized, multi faceted, quality conscious, consumer friendly, Retail Service Economy.
Corporate retail will not create two million jobs — it will destroy 38 million livelihoods – the backbone of Indian unorganized retail economy.
People involved in running small shops, redis and street markets. The growth being projected as a new contribution to the economy hides the destruction of the contribution of the 40 million people involved in small retail to the Indian economy. Indian trade is highly organized and has existed for centuries on the basis of low cost and high efficiency. India needs the self organized skills of our traders, shopkeeper, hawkers and vendors both to provide employment to millions and affordable friendly community service for basic needs to society.
Our retail democracy is characterized by :
1. High levels of livelihoods in retail with nearly 40 million employed which accounts for 8% of the employment and 4% of the entire population.
2. High levels of self organisation.
3. Low capital input
4. High levels of decentralization
India has the highest shop density in the world, with 11 outlets per 1000 people. This number is very high compared to international average. It is the high level of decentralization in Indian market that keeps all these businesses running.
The existing decentralized retail environment in India, is the model for the future democratic, decentralized markets of the world.
Certainly not the so called “Undeveloped Retail”, requiring massive inputs of centralized, global, whimsical, unregulated, injection of speculative capital and logistics operations, governed by investor board rooms.
Unfortunately, there are people who are favouring the model that is increasingly being rejected by the developed countries and large sections of civil society in developed countries, who do not want to be force fed by a handful of consolidated retail chains.
The entry of the giant corporate retail in India’s food market will have direct impact on India’s 650 million farmers and 40 million people employed in retail. If we take examples of other countries, we can see that nowhere ( YES NOWHERE in the developed world, even where sophisticated Independent Market Regulatory Policies and Anti Monopoly regimes, with legal teeth and crippling penalty imposing powers, are in place ! ) have these corporations ever thought about the fragile connections between the People, Society and the Ecology.
Entry of Mega Corporations in Indian food market, will have disastrous political, social, economic and ecological outcomes in time to come, going much beyond the existing stakeholders.
IMPACTS OF CORPORATE ENTRY INTO RETAIL :
SOCIO – ECONOMIC IMPACT :
Livelihood of millions of small and big shopkeepers will be uprooted to set up the chain of corporation owned retail.
After farming, retailing is India’s major occupation. Census 2001 provides us the most authentic data on people involved in retail. According to it, there were 269 lakh `main’ and 24 lakh marginal workers in wholesale and retail trade. That is, nearly three crore people depend on trade, 1.1 crore in the urban and 1.9 crore in the rural areas. Of the total, nearly 1.7 crore are not even matriculates. Thus, the livelihood of more than 30 million is involved and if we count the dependents, in the form of children and others, at least 120 million will be impacted by the retail revolution created by the large corporations. The growth of corporate retail will take place by destroying the self-organized small retail in India.
In past researches have shown us that a growth in unemployment leads to a series of social problems, like rise in poverty, alcoholism, domestic violence, indebtedness, suicides, crime and have major implications by even making the political situation unstable. If we are following the American model of Walmart where the store employee gets a salary which is below the poverty line and the top management gets millions of dollars every year. We are following a trend that increases the divide between rich and the poor and history has shown us that these divide have always led to social unrest and political turmoil of a nation.
In the long run the independence of the farmer will be lost
Reliance and Walmart are presenting themselves as friends and liberators of farmers and they refer to small traders as middleman, as if they are not giant middleman. Atleast in the case of small traders, farmers have a choice in terms of whom to sell. The APMC Acts also ensures that farmers would get a fair price and there would be no single buyer. In contrast, Reliance and Walmart are monopolistic (a situation when there is one buyer and too many sellers) buyers who in due course of time will drive down procurement prices of agricultural and manufactured products.
They claim that they are paying more to the farmers, but the truth is that they are at present procuring from the existing mandis all across the nation, and not straight from the farmers, so there is no question of paying better returns to the farmers.
We have seen the dismantling of mandis in last couple of years in various parts of the country. The primary force behind this was the corporate entry into the supply chain management of food. It is true that this year they have paid better prices to the farmers than the mandis, what is threatening is the reduction in the number of options the farmer is left with to sell his/her crop. Similarly for the manufactured goods, the prices paid by the retails giants might be more competitive than others, but after other retails are wiped out, how many options will the producer have to sell his/her products. Farmers will be bound to produce as per the will of these corporations and have to sell at cheaper prices as decided by them. The experience of farmers of west has been the like this. If we also keep moving in the same fashion and there is no doubt that our farmers will also have to face such situation.
Threat to the existing industries :
Moreover another threat that we will be facing is the opening of a giant pipeline of cheaply sourced goods from China, Thailand, ASEAN, etc., leading to livelihood losses on a massive scale in India. This will be very harmful for our manufacturing sector and specifically our small scale industries. Our manufacturing sector is not as developed as these countries and competing with them at this time means wiping out our manufacturing industries.
ENVIRONMENTAL AND HEALTH IMPACT :
Climate change :
Climate change due to air pollution is already becoming a threat to human life. Temperatures are rising, sea level is rising and glaciers are melting. The imperative in the contaxt of climate change is to prevent increase of use of fossil fuel. Our hawker, redi wala and kirana store is the solution to climate change.The Reliance , Bharti- Walmart model will increase fossil fuel use and carbon emissions. Further destabilizing the climate the super market Lorries will consume huge amount of fuel and lead to enormous pollution. Even if we go by conservative estimates the super market Lorries in India will generate more than 7 million tonnes of carbon dioxide per year, adding more problems to the already fragile environment of the country. When petroleum is becoming more and scarcer, the Lorries of these supermarkets will consume more than 1 billion litre of petroleum per year.
For refrigeration of the vegetables and fruits, and for air-conditioning the retail outlets atleast 20,000 megawatt of additional electricity will be needed. We need to burn millions of tonnes of coal everyday to get this energy; the carbon-di-oxide released from burning this coal will substantially affect the climate patterns of the country. We are already in a stage where the present levels of pollution, and carbon-di-oxide emissions is going to wipe out the human existence out of world in a few years, at this point creating any model that increases carbon-di-oxide in the environment will be disastrous to all of us, even the propagators of this model.
Excessive Pesticides and Preservative in our food : The giant retail chains have their own standards of buying farm produce impacting on agricultural practices of independent farmers. Without using excessive pesticides it is very difficult for a farmer to produce fruits and vegetable which fits into the standards, so they are forced to use excessive insecticides and pesticides. Once these farm produce come to the retail giants, they sell it throughout the year, by preserving them in cold storage, but in the process a lot of preservatives are also added to the food. So at the end when a consumer gets a “preserved†vegetable from these giant stores, it is full of toxic material harmful for consumption.
Packaging of food creates a huge amount of unnecessary waste in the already polluted cities, woefully lacking, immense investments in waste recycling and disposal of food packagings.
At a time when every city and City Municipal Council, in the country is struggling to solve the problem of solid waste and refuse from urban environments, increase in the packaging waste, due to the mall culture will add to their woes.
Will these corporates and investment barons carry the financial and health burden of this packaging waste recycling and food wastage ?
The existing land fills are getting filled and then more land of the poor farmers will be acquired to make landfills for Reliance’s and Walmart’s packaging waste.
Sir, Corporate Retail giants like Walmart, Carrefour, Reliance and Tesco have become agents of destruction of skilled and semi skilled employment, community sharing practices, and respect for the local environment.
These mega retail brands have become known as Big Brands, in developed economies for all the wrong reasons, leaving behind, priced out Farmers forced to leave farming, and consumers identified by Shopper ID and Shopping Points !!
Across the world, movements are going on to create local farmers markets and street markets to resist the monoculture and monopolies of supermarkets. But alas, they come too late in the developed world, where only a small minority of overall population, constitutes the farming community and merchants.
Farmers in developed countries have been priced out of sustainable farming by food retail companies, into social security nets of developed countries.
Not so in India, which lacks even a semblance of legal infrastructure, citizen livelihood security, unemployment benefits and social security investments by federal or state governments !!
India has the diversity and the decentralization that large sections of increasingly restive civil society of the developed countries are seeking.
Let us not allow the destruction of our rich and robust small scale retail at this important and decisive phase of our collective retail democracy.
Let us not vote for monopolies, trade blocs, angel investors, venture funds, hedge fund investors, speculators, and invisible corporate boardroom investors, by playing illogically and against our collective self interest, with the diversity of our existing retail infrastructure.
Let us protect our diversified, decentralized retail democracy. Save our livelihoods, save our farmers, save our traders, save our communities, save our citizens. Save India.
Charter of Demands :
A Enact strict law to ban all corporations in retail and agriculture
B Cancel all Wholesale Cash-N-Carry permission granted to foreign corporations & immediately stop the backdoor entry of Wal-Mart
C Formulate a National Policy on Regulating Retail Trade and Small Manufacturing Industries
D Implement the National Policy on Urban Street Vendors in all states and municipalities with central financial support.
E Institute Independent Special Task Force comprising representatives of stakeholders to Study on the Socio-Economic-Environmental and Cultural Impact of Corporate Retail
F Enact stiff binding laws against predatory pricing, cartelization, price fixation, speculation, mergers and anti-competitive conduct of corporations
G Repeal the APMC Model Act
H Decriminalize street vending by amendment to the Indian Penal Code, Police Act, and all relevant State and Municipal acts.
I Protect natural markets
J Provide social security for hawkers, including pension, maternity, and health benefits
French supermarket prices rise 5% in a year :
The French Economic Affairs Minister Christine Lagarde said yesterday that prices in French supermarkets increased by about 5% between February 2007 and February 2008.
Kerala to examine legal aspects for banning retail chains :
THIRUVANANTHAPURAM: The CPI(M) led LDF government on Tuesday said it would examine all legal aspects of bringing forward an ordinance to ban retail chains of national and multinational companies.
Replying to a calling attention on the difficulties faced by small time traders after the arrival of multinational retail chains, Food and Civil Supplies Minister C Divakaran told the assembly today that the government welcomed the idea of banning retail chains of big companies and would examine the legal aspect for the same.
He said the government had already sent to the Centre, a draft bill of the State’s Essential Commodities Act, to control retail chains of big companies and was waiting for its approval.
To face the challenge from these companies, the government would strengthen and modernize the Public Distribution System and open more Civil Supplies Corporation outlets. There were also plans to open hi-tech super markets in towns, he said.
Congress MLA N Sakthan spoke of the problems faced by lakhs of small traders and asked the government to make necessary amendments in the Panchayati Raj Act to prevent the entry of retail chains of big companies.
Protests in Kerala, govt allies say it’s endorsing organized retail :
Organized retail chains have faced violent campaigns against them in the state, with a number of these protests led by constituents of the ruling Left Democratic Front
http://www.livemint.com/2008/03/09230531/Protests-in-Kerala-govt-allie.html
Kochi: The Kerala government’s proposed 10% surcharge on the profits of big retail chains, paraded as a hurdle to the entry of the giants, has run into trouble, with members of its own ruling communist alliance condemning the plan as —actually—an endorsement of organized retail.
Kerala minister for food and civil supplies C. Divakaran said the proposal will be opposed at all levels and claimed the “surcharge is an incentive to retailers.”
Organized retail chains have faced violent campaigns against them in the state, with a number of these protests led by constituents of the ruling Left Democratic Front.
Reacting to the criticism, state finance minister Thomas Isaac said: “There is nothing like legitimizing this. It (organized retail) is there and we have decided to tax them. It is true that there has been stiff opposition to their entry into the state.
But, the law does not prevent them from setting up shops and imposition of additional levies on these big chains has been demanded by almost all sections of society.”
Local self-government minister Paloli Mohammed Kutty admitted that the law does not prevent big retailers from operating in the state, but said his party would try to find ways to oppose their entry. If local self-governments, such as panchayats, municipalities or corporations, withhold licences to the retail chains, they approach the tribunal for local self-government institutions and get the orders, he said. Indeed, the tribunals often rule in favour of the corporations.
In Solidarity!
Dharmendra Kumar
Director
India FDI Watch
M-09871179084
Brihat Bangalore Mahanagar Palika (BBMP ) Office locked by Farmers and Vendors :
Dear Friends,
Farmers and vendors blocked and locked the Brihat Bangalore Mahanagar Palika (BBMP) office -
(as reported by Mr. Babu Khan, Campaign Organizer, India FDI Watch, Bangalore)
Bangalore, March 11th 2008 : Tuesday a busy day for K.R.Puram farmers, traders and vendors, because Tuesday is the weekly market day in this area. Many farmers, local retailers and vendors usually comes to K.R.Puram to sell and purchase the goods. Local people of surrounding areas also visit the market because the vegetables and other commodities are available at cheaper rates. This market is having a history of more than 50 years and the daily market started almost 15 years back to support the local retailers and consumers. Farmers are coming here as far as from 60-70 Kms from rural areas. The business usually starts around 4am in the morning and continues till the evening. More than 2000 local vendors and retailers depend on the market. Farmers, coming from the rural area, to sell vegetables have to pay tax for each bag and vendors also pays daily tax for the small space they occupy.
Along with India FDI Watch, hundreds of farmers and vendors marched towards BBMP office, shouting slogans. They blocked and locked the office, the Deputy commissioner of Bangalore arrived and discussed the issue with protesters and announced that, the issue will be solved within 2 days. For two days no tax will be collected from the farmers.
Recently an order was issued by the Assistant Revenue Officer ordering higher taxes for the farmers and retailers. Contractors in nexus with corporation officials were exploiting the farmers and vendors to encourage corporate malls coming around in the area. Protesters demanded immediate removal of the officers and contractors involved in the exploitation of farmers and vendors. They also demanded the Deputy Commissioner that, within the radius of 5 Kms of the market, corporation authorities should not give permission for any corporate store.
Other demands include basic facilities in the market, drainage and rest house for the farmers.
Mittals name retail stores Bharti EasyDay
http://www.financialexpress.com/news/Mittals-name-retail-stores-Bharti-EasyDay/282409/
New Delhi, Mar 9 Bharti Retail, which has tied up with Wal-Mart, the world’s largest retailer, will name its convenience stores Bharti EasyDay. The first batch of stores will be launched on April 2. A total of five stores will be launched initially�€”four in Ludhiana and one in Chandigarh. The convenience stores will focus heavily on the food and beverages section. According to industry sources, the stores would be modelled on Reliance Fresh stores. The store size will vary from 1,300 square feet to 3,000 sq ft.
As is known, Wal-Mart has a technical agreement with Bharti for Its front-end retail stores. For the back-end cash and carry segment the two Companies have entered into a 50:50 joint venture. As earlier reported by FE, Wal-Mart Inc’s vice-chairman Mike Duke had clearly hinted that the front-end stores would not carry the Wal-Mart tag. This is because three-fourths of Wal-Mart’s international business earnings are under 52 local brands across the globe. “We want to be seen as local retailers serving the needs of the local people in an area,” Duke had said. However, Rajan Bharti Mittal, managing director, Bharti Enterprises, had earlier said the final rollout plans of the retail and cash and carry stores would be made in April, and brand names for the retail and cash and carry stores would be announced then. According to industry sources, the forced closure of Reliance Retail stores in Uttar Pradesh might have prompted Bharti to rework its branding strategy, and drop the Wal-Mart name to avoid any negative brand perception.
The first cash and carry store operated by Wal-Mart will be rolled out by the year-end. Bharti-Wal-Mart is expected to open 10-15 cash and carry stores in seven years and employ about 5,000 people.
Reliance Retail in JV for optical stores
The JV hopes to roll out its stores by September and expects to have a large network of outlets
http://www.livemint.com/2008/03/03002658/Reliance-Retail-in-JV-for-opti.html
Reliance Retail Ltd has formed a 50:50 joint venture with Europe’s HAL Holding NV to open stand-alone optical stores throughout India, eyeing a business that is virtually controlled by the unorganized sector.
The joint venture proposes to seek permission from India’s Foreign Investment Promotional Board, which approves and regulates foreign investment in the country, to operate stores here. The stores are kosher under India’s fairly restrictive laws regulating foreign investment in the retail sector because the country allows 51% foreign ownership in single-brand retail. HAL is the holding firm for a raft of leading European optical retailers who collectively run more than 2,500 outlets in two dozen countries and operates stores under Vision Express in the UK, Apollo Optik in Germany, Pearle Opticiens and various other brands in countries from Norway to Australia.
Joint venture hopes to roll out its stores by September and expects to have a “large network” of outlets across the nation. “The (brand) name is still being firmed up but Vision Express looks like the most prospective name as it’s very popular in the UK and other countries.
In Solidarity!
Dharmendra Kumar
Director
India FDI Watch
M-09871179084
न्यू यौर्क शहर प्राधिकरण नें लघु व्यापारी व सड़क विक्रेताओं को फल व सब्ज़ी बेचने के लिए नए लाइसेंस जारी किये -
New York‘s City Council has passed a bill to issue 1,000 new permits for street vendors to sell fruits and vegetables in neighborhoods where fresh produce is scarce. The council voted 37-9 on Wednesday to issue the permits, which will be distributed among the five boroughs in neighborhoods where at least 15 percent of people surveyed said they had eaten no fruits or vegetables the previous 24 hours.
Department of Health Commissioner Thomas Frieden said the aim of the program will be to introduce fresh produce back into neighborhoods where diabetes and obesity rates have skyrocketed. In was the latest in a series of initiatives by the administration ” including a 2006 ban on trans fats and an ongoing fight to make chain restaurants post calorie counts on their menus ” to make New York City healthier.
BHARTI retail banner name unveiled
According to reports, Bharti Retail may call its retail outlets – Easy Day. The company is finalising its plans for the rollout and is expected to open its first store later this year. “Easy Day was among the names being considered, adding that the company has not taken a final decision on it,” the source added. Bharti Enterprises chairman Sunil Mittal said, “You can hear from us on the final concrete plans before April-end.”
French government attacks food retailers and manufacturers :
The French government has accused food manufacturers and retailers of taking advantage of global food prices to boost their profits and has threatened action against such market “abuses†. Francois Fillon, prime minister, said the government would investigate why prices had risen faster in France than in neighbouring European countries. “There have clearly been abuses on the part of manufacturers and retailers who are profiting from the rises in commodity prices to increase their margins,” he said. Retailers rejected the accusation saying that they had already cut their margins to stem price rises.
TESCO accused of setting up offshore tax avoidance scheme :
According to reports in The Times, Tesco has set up an elaborate offshore tax avoidance scheme which could see the retailer avoid paying as much as GBP1 billion (USD2 billion) of tax on profits from the sale and leaseback of its UK properties to external investors through the use of a number of companies in the Cayman Islands. The story cited a Tesco spokesman as saying the allegations were “wrong… Far from avoiding tax, Tesco is a top ten UK taxpayer, contributing more than GBP1 billion (USD2 billion) to the Exchequer last year. The profits from Tesco’s share in these offshore property partnerships are included in full in Tesco’s UK tax returns and the details of the agreements have been provided to Her Majestys Revenue & Customs department.”
Organised Retail sector seeks industry status in this budget
FICCI had prepared a charter of demands for the US$ 12 billion “organised retail sector”, which is currently growing at 30-35% per annum.
Here is a list of major demands :
· The sector should be granted industry status.
· Uniform tax structure should be implemented. Gradual shift from the various state taxes to uniform tax would result in ease in sourcing goods efficiently and in turn aid the growth of the retail sector. The introduction of VAT in all states would result into the scrapping of differential sales tax prevailing in different states on the same product.
· Allow retailers to adjust the service tax on all inputs (rents and telephone) against the sales tax they collect from customers. The retailers who pay the state VAT do not have any output service tax against which they can set off service tax paid by them.
· Eliminate multiple licenses and clearances. Retailers need to obtain licenses and permits such as basic trading licenses, product specific licenses, pollution clearances etc for every retail outlet (even its a chain store). This only delays the opening of stores and increases cost.
· FDI limit should be further liberalised, which will ensure development of robust cold chain system, bets retailing practices and wide range of goods and services at competitive prices. It will also bring along with it increased focus on farmer education and training resulting into better crop/ yield management practices. 100% FDI in multi brand retailing must be allowed in certain areas such as electronics, automobiles, sports goods etc.
In Solidarity!
Dharmendra Kumar
Director
India FDI Watch
M-09871179084
राजस्थान की भाजपा सरकार नें किराना व लघु व्यापारी समर्थन में कानूनी कदम उठाए -
Small traders and hawkers won another battle. This time in Rajasthan. In its fifth budget, Rajasthan’s BJP government has proposed several ‘small trader’ friendly proposals – including a four percent tax on fruits and vegetables sold by corporate-run food stores like Reliance Fresh and Spencers. The levy is aimed at protecting street vendors. Prabhulal Saini, Agriculture Minister, Rajasthan said, “Small vendors and traders cannot compete with big retailers. So to bridge this gap and encourage the small traders, we have made a proposal to levy 4% tax. The small vendor should be able to sell vegetables without paying tax, get concessions & earn his livelihood.
In another development, European Union (EU) calls for new supermarkets inquiry. The European Union assembly has this week called for an investigation into the practices of the larger grocery chains across the continent. The assembly said that the EU’s competition body, the European Commission, should intervene to protect consumer choice and the environment.
Reliance is close to signing an agreement with Polo Ralph Lauren, the US-based design and distribution house, known for its range of high-end casual and semi-formal clothings as well as accessories and fragrances under internationally famous luxury labels like Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren, Black Label, Blue Label, Lauren by Ralph Lauren, Chaps and Club Monaco, to bring these premium products in India. However, it is noteworthy that only last week, following opposition by the Pacific Heights Neighborhood Association and the Fillmore Merchants Association, the city Planning Commission of San Francisco voted 6-1 to deny Ralph Lauren permission to open a boutique on Fillmore Street. People are battling against Ralph Lauren in San Francisco’s neighborhoods, and Pacific Heights is the front line. Ralph Lauren had signed a lease for 3,500 square feet at 2040 Fillmore St., the former site of Smith & Hawken, another chain store. The New York-based fashion retailer has long wanted to open a shop on Fillmore Street, where upscale national brands like Marc Jacobs, Simon Pearce and Jonathan Adler have rung up success and turned the neighborhood street into a shopping destination where one-off boutiques mingle with national players. While the Planning Department had recommended the commission approve a conditional use permit for Ralph Lauren, the Fillmore Street Merchants Association has decided to oppose all future chain retail.
Subhiksha, the discount retail chain of India, moves to legal measures to get drugs as drug companies’ are refusing to sell medicines directly to corporate retailers for fear of a boycott by their current retailers and wholesalers. The large drug retailing (5.5 lakh chemists across India) and wholesale industry is extremely well organised and is able to resist corporate hijack through the All India Organisation of Chemists and Druggists.
In Solidarity!
Dharmendra Kumar
Director
India FDI Watch
M-09871179084
-
Flickr Photos
![Four in a Row [Explored]](http://static.flickr.com/7018/6782703137_25b3b3b811_t.jpg "Four in a Row [Explored]")
More Photos
