Bharti, Wal-Mart execs to meet today

Aware of the controversy generated after Sonia Gandhi's letter on retail, the Wal-Mart team is planning to meet Bharti executives in Mumbai on Thursday to finalise its joint venture for retail. The foreign company's team is headed by Wal-Mart International chief executive and president, Michael Duke, who will discuss a slew of agreements with Bharti Enterprises joint MD, Rajan Mittal, heralding the world's biggest retailer's entry into India. The agreements will include cash-and-carry joint venture, technical know-how and sourcing arrangements. Sources said the companies may have decided to shift the venue to Mumbai to avoid being in the political eye. They added that though detailed discussions will be held on the retail strategy and joint venture, but the final agreement will be signed later. The team may also visit Delhi later to meet key government officials. A section which has opposed the opening up of retail, is of the view that Wal-Mart venture with Bharti was a "facade, and a back-door entry"for the foreign company. "Wal-Mart will not enter any market without having a presence in the front-end (of retail) and the agreement (with Bharti) will be cleverly documented so that it has a significant share in the front-end operations, probably at a later date", sources said. "The agreements will be such that the foreign company gets a toe-hold when the sector is finally opened up,"they added. Wal-Mart and Bharti officials were not available for comments. Even though the agreement between the two companies may be within the existing policy framework, they have decided to keep it under wraps. This may be because of the negative sentiment it has evoked within political circles. Earlier this month, Congress Party chief Sonia Gandhi had expressed concern in a letter to the prime minister about "the Wal-Mart effect"on domestic retailers, and the need to study the impact of transnational supermarkets on the "livelihood security"of small-store owners. Moreover, Bharti's hurriedly called press conference on February 19 is being perceived as an attempt to shift the focus to its retail subsidiary, with little or no mention of its agreement with Wal-Mart. Bharti decided to partner the local convenience stores through a franchise model apparently to allay political fears on the sector. In fact, when quizzed further, Mittal said the retail venture was no different from the others such as Reliance, and the company will source technology and best practices from Wal-Mart. "The details of the back-end chain and our tie-up with Wal-Mart will be announced in due course of time,"he had said.
courtesy:economictimes
For more on Retail India visit us at www.retailindia.tv