It is not exactly a rosy scene for domestic retailers, if Government data is anything to go by. Major retailers such as Reliance Fresh, Bharti Retail and Aditya Birla reported a cumulative net loss of Rs 1,163 crore.
“According to the statements filed by the said companies, Reliance Fresh had a net loss of Rs 345.82 crore during 2010-11, Bharti Retail had a net loss of Rs 394.32 crore during 2011, while Aditya Birla had a net loss of Rs 423.1 crore during financial year 2010-11,” the Minister of State for Commerce and Industry S Jagathrakshakan said in a written reply in Rajya Sabha.
Defending the Government’s decision to implement foreign direct investment in retail, the Minister said in formulating the policy for allowing 51 per cent FDI in multi-brand retail, the Government was conscious of the livelihood of small retailers.
“Informed studies of global experience have revealed that even in developing economies such as China, Brazil, Argentina, Singapore, Indonesia and Thailand, where 100 per cent FDI is permitted, local retailers have found innovative ways to co-exist and are integral to the organised retail chain,” he said.
Citing Indonesia’s example, the Minister said even after several years of emergence of supermarkets, 99 per cent of the fresh food retail and 70 per cent of all food retail continues to be controlled by traditional retailers.
On whether the Government was considering setting up a Retail Regulatory Authority, Jagathrakshakan said that the Department related to Parliamentary Standing Committee on Commerce had recommended the constitution of a Retail Regulatory Authority to look into the problems and act as a whistle blower in case of any anti-competitive behaviour and abuse of dominance.