Metro gets licence to trade in notified commodities

Traders are up in arms against the state government for granting licence.

Metro Cash and Carry India, the Indian subsidiary of Germany’s biggest retailer, Metro AG, has succeeded in securing the licence to trade in 112 notified commodities from the Karnataka government after a long wait for close to eight years.

The grant of licence to Metro has surprised traders in the state as they see that “the licence had been given in violation of the Agriculture Produce Market Committee Act (APMC Act)”. The Act stipulates that no private trader can sell notified commodities within a 25 km radius from the APMC yards in the state.

 

The move to give licence to Metro Cash and Carry has irked traders. “When the APMC Act clearly states that no private trader can trade in notified commodities outside the APMC yards, how could the state government give them the licence? It is a clear violation of the Act and detrimental to traders’ interests,” Ramesh Chandra Lahoti, president, Bangalore Wholesale Food Grains and Pulses Merchants’Association, said.

During the President’s Rule in the state in 2008, the state had amended the APMC Act and subsequently permitted Metro Cash & Carry to trade only in perishable commodities like vegetables and fresh fruits. However, the company, which had been struggling to get a licence for trading in 112 commodities since its launch in India in 2003, approached the state government on January 18, 2011, with a fresh application to trade in all commodities and secured the licence the same day, Lahoti told Business Standard.

When the traders approached chief minister B S Yeddyurappa and brought to his notice, he promised them to cancel the licence immediately. However, the chief minister has not taken any action yet, N S Srinivasa Murthy, president, Federation of Karnataka Chambers of Commerce and Industry.

“The state has violated all norms in giving licence to Metro. If the government does not cancel their licence immediately, the traders will launch a state-wide agitation and suspend trading operations in agri commodities,” he said.

When contacted Laxman Savadi, minister for cooperation and agri-marketing, did not respond to queries. Since its India launch in October 2003, Metro Cash and Carry has opened two outlets in Bangalore and Hyderabad, one each in Kolkata and Mumbai.

The company has the necessary approvals for procuring and selling all kinds of agri commodities from APMCs except Bangalore where they do have a licence for perishables. It has been eight years since it secured the complete licence in the state.

A spokesperson of Metro Cash & Carry India said: “We had applied for a licence to deal in all the notified agricultural products under the APMC Act after the law was amended in 2008. After more than two years, the company has received relevant licence following due process of law.”

Though the retailer has a fruit and vegetable licence from the APMC, it has been granted permission for procuring cereals and pulses only last month by the state government.

“This step will enable Metro to procure cereals and pulses from APMC yard. It will not only benefit the company from saving cost, but also reduce the role of intermediaries in the whole supply chain management,” an industry expert said.

He also said this would enable a better price discovery for farmers’ produce in the APMC yard. There are 3,000 traders in Yeshwanthpur market yard which are supported by around 10,000 support staff and headload workers. Over 3,000 lorries operate every day.