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Old 30th November 2011, 21:24   #76
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

I will be pretty plain - the attitude of small retailers is plain restrictive trade practise. WIll elaborate below.

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Originally Posted by WindRide View Post
Or is all the hue-and-cry just petty vote-bank politics?
Obviously bank politics; votes are plain bonuses.

500 INR per retailer per election x 50,000 retailers in KL = INR 2,50,00.000 per party per election. A big chain will drive away demands for political contributions. May be, 5 lakh per chain per political party.

Before you proceed; have you guys heard of "Shrikhand". Please do not laugh. I too had had heard only of this thing. That is, till Reliance opened their Malls in KL. Shrikhand was unavailable in KL till the big retai chains opened here.

Most "kirana" stores in KL, at best, store, may be 3/4 varieties of rice. Sorry, I have very different tastes from the typical Malayalee. I find the variety provided by these guys inadequate.

That said, Varkey's, a local chain opened a shop near my home. I thought the retailers will shut shop pretty fast. But, - believe it or not - the local retailers began better variety, more items better stock, and drove Varkey's out of business. (of course, there were other reasons for Varkey's downsizing their chain size).

Competition always helps.

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Originally Posted by mayankjha1806 View Post
Do we know how much is Food wastage in India, because the Government godowns are limited and they dont have space to store more? Last year alone it was 12+ Billion $ worth of food was wastage.
True; but bad reason for allowing FDI. There is something called "diminishing marginal returns".

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Do we know how much a farmer sells his produce for and the middleman take the rest?
+1. When Reliance paid cash down for their purchases in MP / UP, they were driven out by the middle men. Because the farmer's dependence on the middlemen was being broken.

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We are constantly short of food
Stand on top of one of those wheat mountains in Punjab, and repeat that. ;-D

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(One of the reasons inflation in food prices are highest, shortage of supply). Fiscal measures (like raising interest) are not working because there is a supply side shortage and no monitory policy can work in this situation.
Interest is a part of cost of holding inventory. Higher interest rate means higher cost of holding stock means higher cost for middle man (whether the local guy or the phoren kompany); means higher cost. IMHO, inflation in India is cost push. RBI can disagree with me, but they need to put their heart and mind to the ground first.

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Now the problem for local nearby store. Do you think to buy something small (for everyday needs) i would drive to the 5Km away Walmart of get it from the guy next door (small shop owner) in 5 min walk?
Nope; I will buy a bigger refrigerator and buy more from the big store every time I go out.

For me, as a customer, a big store is certainly a change. I do NOT do my regular shopping there. My regular shopping happens at the local market. The neighbourhood kirana store is too expensive for me.

I go to the big chain stores - Reliance, More, Spencer's etc - when I want to vent my spending urge. The kirana guy will never get that money. And the big name retail store will never get the money I give to the local retailer - whether it be the neighbourhodd guy or the local-market guy.


And in the end, I would like to point out - such a simple thing as a "pepper mill" that small bottle thing in which you put pepper, invert turn the lid to get pepper power - is NOT available in any shop in the Broadway or Market in Ernakulam. It is available, for me, from Ikea store in Dubai. Or at the FoodBazar store on NH byepass.

None of the local shops here store cheese. Or mushrooms. Or Haldiram's products. Or masala powders from MTR. Duh. Tea leaves? I need to scout around. A month's shopping depending on the local stores, with the above items in regular use will make me run around at least 5 KM - and existnce of most of those things are not even known to the retails. At a a big name retailer, all these are just a matter of shelves.

Last edited by BaCkSeAtDrIVeR : 30th November 2011 at 21:28.
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Old 30th November 2011, 21:45   #77
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

Quote:
Originally Posted by BaCkSeAtDrIVeR View Post

Before you proceed; have you guys heard of "Shrikhand". Please do not laugh. I too had had heard only of this thing. That is, till Reliance opened their Malls in KL. Shrikhand was unavailable in KL till the big retai chains opened here.

Likewise, Oats for the diabetics or cornflakes for the slightly lily-livered sepcies was never stocked in out Kirana stores and you may have to endure the stare from the shop wallah too when you ask these "phoren" things



And in the end, I would like to point out - such a simple thing as a "pepper mill" that small bottle thing in which you put pepper, invert turn the lid to get pepper power - is NOT available in any shop in the Broadway or Market in Ernakulam. It is available, for me, from Ikea store in Dubai. Or at the FoodBazar store on NH byepass.

None of the local shops here store cheese. Or mushrooms. Or Haldiram's products. Or masala powders from MTR. Duh. Tea leaves? I need to scout around. .
Yes , the things you quoted above which are not even in the periphery of the consciousness of the "frog-in-the well", retailer, let alone knowing about them was denied to us all these days. I was cursing these things only all these days " even if you are willing to pay good money , you never get the things you want in Trivandrum shops". Bah! Atleast hose things are thrown open for buying nowadays,thank god!

Last edited by srikanthns : 30th November 2011 at 21:46. Reason: missed adding retailer
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Old 3rd May 2012, 12:11   #78
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

Bumping this old thread, this news is back here is the link.

Source : PM's panel to review food storage problem - Yahoo! India Finance

This line caught my attention

The problem gets compounded as the government's scheme to build additional storage capacity has not matched pace with the bumper crop in the past three years, said officials.
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Old 3rd May 2012, 12:26   #79
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

Storage and shortage are very similar looking words but enormously different in their meanings. If these excess food could be distributed through proper channels, they will not need much storage.
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Old 3rd May 2012, 15:43   #80
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

The whole argument of the politicians is about the 'poor farmer'.

Simple economics the farmer gets paid more, the end buyer pays less. Who loses the middlemen and the crooks. With better handling and processing in due course wastage also comes down. Also not a bed thing.

As far as I have heard that the supermarkets still employ middlemen (just 1 between them and the farmer). So the multiple stages get cut out. Also, I am sure the tax collection will go up - after all a super-market cannot do much of 2 number.

If the economics do not work out then good bye Carrefour, TESCO, Walmart, Marche 2, and co. and back to the old local shop.

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Old 14th September 2012, 20:43   #81
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Originally Posted by apachelongbow View Post
Breaking news! Govt approves FDI in retail and aviation!!! Is it a sign of coming times that the govt has finally woken up and is now not ransom to its thug like allies?
I hope so! Positive news at last. BTW sensex up by 400+points!!1
Although this is kind of OT, can someone please tell me why we need FDI in retail and aviation? I mean is the domestic retail industry (organized sector) crying for it? From what I have read in recent trends they were doing reasonably well. I also had read individual states have the power to bar FDI in multi brand retail so I don't think this decision is going to impact much. Only two states have expressed interest in allowing MNCs to run multibrand retail as far as I remember. I think one of them was somewhere in North Eastern India .

As to aviation, the only person who is currently crying for FDI is Mr. Mallya whose poor business sense coupled with unwise investments in an F1 team that most of the time ends up at the rear giving him massive losses and a terribly run airline because he was more interested in producing branded calendars has landed him in a huge soup. Why does he expect some foreign airline to come and bail him out?

All these steps in reality will most likely not make any dent in the deficit balloon. The only thing it would do is push CPI north of where it is now, thereby defeating the very purpose of these steps. Unless the government has the guts to step forward and eliminate the colossal waste that happens in commodities (India loses a significant percentage due to lack of adequate storage), end cronyism and corruption in every sphere of life, the deficit will only go up.
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Old 14th September 2012, 21:07   #82
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

Cool finally government has woken up and given its nod for 51% FDI in retail http://timesofindia.indiatimes.com/b...w/16397960.cms
This is a good move and benefit the consumers and will reduce the food wastage and inefficiencies in our supply chain. Only people who will be at risk will be intermediaries/middle men like dealers , stockists etc. Mom & Pop store will not be wiped out as there target customers are different from a WalMart / Tesco. Here in US I can see plenty of neighborhood stores coexisting with Walmarts hence it I support this move...overall very good for end customers.
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Old 15th September 2012, 01:42   #83
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

Anyone concerned about genetically modified produce that is likely to come along with your Wal Marts, Tescos etc? Genetically modified food has been linked to cancer and other diseases. There's already an epidemic of diabetes and heart disease in this country. Do we need to add cancer to the list? The question is, do we need these big retail Goliaths in India?. Aren't we doing ok without them?
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Old 15th September 2012, 02:34   #84
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

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Originally Posted by Wolfheart View Post
Anyone concerned about genetically modified produce that is likely to come along with your Wal Marts, Tescos etc? Genetically modified food has been linked to cancer and other diseases. There's already an epidemic of diabetes and heart disease in this country. Do we need to add cancer to the list? The question is, do we need these big retail Goliaths in India?. Aren't we doing ok without them?
Genetically engineered food is of least concern but we all should be really concerned about our basic food items a like milk,oil, spices, food grains etc as they are all adulterated or of substandard quality even after paying a higher price.

Diabetes and heart disease are life style related problems people need to eat healthy and exercise there bodies once in a while. Truth is that we are consuming more fat and sugar laden diet without any exercise leading to call this trouble

Having a organized retailed sector will definitely create a large amount of jobs for the youths of this country who have no jobs nor nothing to look forward.

Last edited by tj123 : 15th September 2012 at 02:38. Reason: Typo
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Old 15th September 2012, 07:01   #85
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Quote:
Originally Posted by Wolfheart
Anyone concerned about genetically modified produce that is likely to come along with your Wal Marts, Tescos etc? Genetically modified food has been linked to cancer and other diseases. There's already an epidemic of diabetes and heart disease in this country. Do we need to add cancer to the list? The question is, do we need these big retail Goliaths in India?. Aren't we doing ok without them?
Complete rubbish. Please cite one study in a respectable scientific journal that shows that GM crops cause cancer. It galls me that people make all kinds of idiotic statements without bothering to verify facts. Genetic modification is no different from what farmers have been doing for thousands of years, through selective breeding, grafting and more recently, hybridisation. This is just a more direct (or complicated) way of achieving the same results.

Even the Europeans who oppose GM foods only claim that there is no proof that GM crops don't cause cancer when ingested over long periods of time - and cite the rubbish "precautionary principle" to ban them. If this principle were followed, there could be no scientific progress as no one would be able to prove that something does not cause harm over a long period of time without using it for a long period of time. At any rate, GM crops have been used in the US for c 20 years now, and I am not aware of any cancer epidemic yet. (But who knows, may be they take 90 years to kill you).

Further, foreign retailers are no more likely than Indian retailers to sell GM crops. French retailers like Carrefour would likely not carry them due to their home market laws, and even others are more likely to follow any rules imposed regarding labelling etc. than your neighbourhood "kirana" shop who happily uses poisonous materials to adulterate normal crops.
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Old 15th September 2012, 10:20   #86
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The big retailers will at least give me a bill. So Iam sure that some tax is falling into the govt. coffers. That it is wasted is another story alltogether. Our neighbourhood kirana owners, middlemen hardly ever paid any income tax though enjoying every facility available to them.
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Old 15th September 2012, 10:43   #87
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

That visit of Hillary Clinton to Mamta Banerjee ( She met her first, bypassing our Mute Prime Minister, a slap(richly deserved) on the standing of the PM in our country) sure seems to have "Worked the Magic".
Didi is now just registering a token protest.
Ah the sweet scent of Democracy of India.
Bring on the FDI.
It won't be as damaging to our country our Politicians (and us the Indians who elect them).
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Old 15th September 2012, 10:49   #88
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

I am all for it. Just for kicks, why don't we start a poll in this thread?

--R
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Old 15th September 2012, 10:58   #89
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Default Re: Foreign Direct Investment in the retail sector. Good or bad?

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The big retailers will at least give me a bill. So I am sure that some tax is falling into the govt. coffers. That it is wasted is another story altogether. Our neighborhood kirana owners, middlemen hardly ever paid any income tax though enjoying every facility available to them.
This is something I am also looking for. But, I really doubt the bill directly reflects what they are paying as Tax. That's a different argument though.

The main idea in opening this market is to see of the new comers are going to invest in cold storage, and reduce wastage etc. But, this could have been done by our own govt, if efficient. Again, they are not opening because it will help poor farmers, or provide more jobs. The real reason is they need to fill up their finances. The rest are just some reasons found to support it.
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Old 15th September 2012, 12:42   #90
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Although this is kind of OT, can someone please tell me why we need FDI in retail and aviation? I mean is the domestic retail industry (organized sector) crying for it? From what I have read in recent trends they were doing reasonably well.

As to aviation, the only person who is currently crying for FDI is Mr. Mallya All these steps in reality will most likely not make any dent in the deficit balloon. The only thing it would do is push CPI north of where it is now, thereby defeating the very purpose of these steps. Unless the government has the guts to step forward and eliminate the colossal waste that happens in commodities (India loses a significant percentage due to lack of adequate storage), end cronyism and corruption in every sphere of life, the deficit will only go up.
whole idea of FDI is to ensure deep pocketed investors, with experience in their core areas come and invest in India. As you rightly said the beer maker doesnt have either core competence in aviation, nor deep enough pockets, nor knowledge of the industry to run an airline. If a big foreign airline now invests in KF, it will gain money, core competence and international knowledge in running successful airlines. This is the way forward.
Regarding retail, the benifits are even bigger. A large Walmart, CareFour or IKEA eliminates the much hated dalal/middleman from the equation. These stores take produce, raw material and goods directly from the farmer/vendor. Infact they have long range tieups with small producers who work exclusively for them. Plus guaranteed prices which are far cheaper than lalaji stores.

CPI and food inflation is mainly due to high hoarding by lalaji and middlemen. Once these goon are out of the equation prices will automatically rationalize. This is the sole reason why most of the politicans hate FDI in retail. Their votebase will be left penniless.
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