Metro gets licence for wholesale business in West Bengal
11 Oct 2008
German wholesaler Metro Cash & Carry has finally managed to get a licence to operate a `business-to-business' model wholesale distribution outlet, but sans the minimum purchase limit of Rs5,000 the West Bengal State Agricultural Marketing Board has earlier insisted.
Metro, however, cannot use the unspecified business model it had been demanding, and the licence will be valid till next March, board chairman Naren Chatterjee said.
Metro will open its wholesale outlet off the EM Bypass within eight weeks, its its fifth in the country – Metro has two outlets in Bangalore and one each in Hyderabad and Mumbai.
The Forward Bloc-run State Agricultural Marketing Board has, however, made it mandatory for Metro Cash & Carry to ensure that it trades with those having a trade licence or the Regulated Market Committee (RMC) licence.
It will also have to furnish the list of traders it deals with to the marketing board for scrutiny. ''Some board employees will be posted there at the cash counter to scrutinise the bills and challans,'' Chatterjee said.
The conditions would apply only to agricultural produce and not other commodities such as FMCG, electronics and textile. The state marketing board can only regulate procurement and sale of agri-produce under the existing Agricultural Produce Marketing and Control (APMC) Act.
''The company cannot go for contract farming even as the recent central guidelines to change the APMC Act provides for it. Agriculture is a state subject and the government won't allow it. Corporates can't influence the farming process while procuring vegetables or crops," the board chairman said after coming out of the meeting.
''Metro officials will have to send their stock statements to the marketing board on a regular basis. Any legal dispute with the supply major has to be settled in Calcutta High Court and not in Germany, because that would make things worse for farmers,'' Chatterjee said.
''Metro Cash & Carry would be allowed to do wholesale trade only. And, purchase can only be made with trade and APMC licensees, the question of fixing a minimum amount of bill does not arise,'' Chatterjee said.
Against each transaction, the marketing board will get one per cent of the trading amount from the German major and another one per cent from the trader, as marketing fee.
The agreement was signed and the licence issued after four hours of closed-door meeting between Metro and state government officials.
According to Metro officials, the wholesale centres would cater exclusively for professional business customers, who are duly registered and having a customer identification card.
''Metro Cash & Carry supports its core target 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,'' a Metro Cash & Carry India press release said.
