Middlemen behind Maya order, feel retail players

Following UP Govt's decision to close Reliance Fresh stores, big retail players are waiting for clarity on the order, reports Saurabh Turakhia.

Following the Uttar Pradesh government’s diktat to withdraw the agriculture development and investment policy incorporating contract farming and, furthermore, its decision to close Reliance Fresh stores, big retail players are awaiting more clarity on the order. Most of the players have big plans to expand in the state.

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While some chose not to comment, others were of the opinion that it is not the farmers who are opposing the stores but perhaps the middlemen whose interests may be threatened because of direct sourcing.

When contacted, Sanjeev Goenka, vice-chairman, RPG Enterprises, said: “We will need to first study the order of the government in detail and then comment.” However, he maintained that the group had aggressive plans for UP.

Ashok Maheshwari, managing director, Home Care, which owns the large-format Magnet stores, said that three properties of 50,000 square feet each were under construction in Lucknow, Kanpur and Noida. He said that these properties should be operational in a period of six to eight months. Commenting on the state government’s move, he said, “I think the scenario is not very clear, though I think there is some opposition to contract farming.”

“We need to understand this industry and since it is the initial phase, there will be certain disturbances,” he added.

R. Subramanian, managing director, Subhiksha, said: “I don’t think the farmers are opposing at all. I think the middlemen have instigated this. The farmers have nothing to lose in the model of direct sourcing. On the UP government’s part, since there have been law and order problems after the opening of the Reliance Fresh stores, it wants to get the situation under control and does not want further provocations.”

He added that Subhiksha has around 60 store in UP and had plans to add 120 more by the end of March 2008. He said he did not foresee any problems for organised retail in the state.

Kishore Biyani, chairman, Future Group, which has its chain of Food Bazaars, did not wish to comment on the issue.