German firm defers taking decision on West Bengal

September 25th, 2008 - 6:49 pm ICT by IANS  

Kolkata, Sep 25 (IANS) German wholesaler Metro Cash and Carry has deferred taking a decision about its future in West Bengal as the Left Front government has requested it “to wait” till Sep 29, a top company official said here Thursday. “We had an encouraging meeting with the chief minister and the agricultural marketing minister. Both the leaders requested us to wait till Monday for a government decision on the re-issuance on the APMC (Agricultural Produce Marketing Committee) licence,” said Martin Dlouhy, the managing director of the company’s Indian subsidiary at a press meet.

“We have agreed to honour this request though we are keeping all our options open,” he added.

The state government had granted the company the APMC licence in 2005, which was subsequently renewed twice in 2006 and 2007 and was to have vbeen valid till March 2008. However, in June 2007, the licence was unilaterally withdrawn by the APMC authorities.

The company filed for issuance of fresh APMC licence this March.

“The company invested in this state under the pre-condition that it would be given the APMC licence to deal in agricultural commodities,” said Henry Birr, vice president of Metro group’s international affairs.

“We would be very disappointed if the state agricultural marketing board does not re-issue the licence to Metro,” he added.

The Communist Party of India-Marxist (CPI-M) - the dominant force in the Left Front government - will Sep 28 meet coalition partner Forward Bloc party, to decide on the APMC licence issue.

The Forward Bloc, which controls agriculture and agricultural marketing departments in the state, has been strongly opposing the entry of big business houses in the retail segment.

The German company began constructing a 100,000 square feet outlet in the city on an investment of $30 million a couple of years back. But the project got delayed following a land dispute.

After eight months of legal battle between the state government and the previous owner of the land, Metro finally got permission to resume construction, which resumed last November.

The German major has four stores in India - two in Bangalore, and one each in Hyderabad and Mumbai - where various small and medium businesses such as provision stores, hotels and restaurants have partnered it.

In Kolkata, apart from the under-construction store, three more have been planned.

“German investors are watching this development very closely. If Metro goes out of the state, it will spell death knell for any future investments from Germany in West Bengal,” said Guenter Wehrmann, German consul general in Kolkata.

“Metro is a household name in Germany and for new investments, Germans only look for places where there are other German companies,” Wehrmann said.

Added Dlouhy: “We have explained our business model to the ministers. We are business-to-business wholesalers selling our products to only registered customers.”

Metro officials declined to spell out on whether it would pull out of the state if it wasn’t granted the trade licence, but said if it did get it, operations would start within six to eight weeks.

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