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Feb 14 2013
Armenian PM wades into Carrefour row
Clare Nuttall in Astana
February 14, 2013
The Armenian government says it's set to help Carrefour resolve a
dispute that has delayed the French hypermarket giant's entrance to
the country, in a bid to prevent the country's investment climate
being harmed further by the affair.
As the first international supermarket chain to try to crack the
Armenian market, Carrefour is running up against the power of local
oligarchs who want to keep control of the lucrative food retail
market, say reports. However, Armenian Prime Minister Tigran Sargsyan
has come out in favour of the French retailer, which could pave the
way for Carrefour to open its first store in Yerevan this year.
On February 7, Sargsyan told journalists that, "Carrefour must be
opened in Armenia for sure. I had a meeting with Carrefour
representatives, and we discussed all the issues related to the
entrance of the network to Armenia and its normal operation here.
Armenia is quite interested in providing people with Carrefour's
services," Sargsyan told journalists, Arka reported.
Sargsyan said that the company's delayed entrance to Armenia was due
to disagreements between "private companies" and that his government
had offered to help the company enter the market.
Carrefour's arrival is expected to boost competition, raise demand for
agricultural products and help create new infrastructure, Sargsyan
said.
Carrefour has another supporter in the form of US ambassador to
Armenia, John Heffern, who made his views known over Twitter. "Hear
Carrefour wants to open in Yerevan. I used to shop there in Brussels.
Would be good for competition here. Hope it happens," Heffen wrote.
However, Carrefour's plans are rumoured to have alarmed the owners of
some local chains, which currently dominate the formal retail sector.
Because of its larger purchasing power and proprietary supplier
network, retailers fear Carrfour will be able to undercut them,
potentially putting the handful of local chains that have so far had
the market to themselves out of business - or at least slash their fat
profit margins.
Earlier in February, Armenian newspaper Zhamanak cited sources as
saying that the owner of Dalma Garden Mall, oligarch Samvel
Karapetyan, had suspended the agreement to lease space in the mall to
Carrefour. There are also reports that the space may be leased instead
to Yerevan City, a chain of supermarkets owned by Armenian businessman
and MP Samvel Alexanyan, who is also the owner of Fleetfood, Armenia's
largest importer of wheat, sugar, alcohol and cooking oil.
Opening day
Carrefour's arrival in Armenia has been anticipated for more than a
year, and the first store was expected to open in late October 2012 -
a month after Majid Al Futtaim Holding, the operator of the Carrefour
brand in the Middle East and Central Asia, launched the first
Carrefour in neighbouring Georgia. Carrefour executives have
reportedly been trying for several months to meet with top government
officials in an attempt to break the impasse.
In an emailed statement, Carrefour's press office told bne that, "in
line with its strategy of developing the Carrefour brand, the Majid Al
Futtaim group continues to analyze the Armenian market and aims to
open its first store in the next 12 months."
Armenia's small retail sector is relatively underdeveloped, and still
populated by local players, among them Star, SAS, Galaxy and Yerevan
City - all of which have emerged in the last decade. The supermarket
and grocery chains have gradually replaced open-air bazaars and street
vendors, as Armenia, like other post-Soviet countries, makes its
transition to a formal retail sector. However, as of 2012, the level
of formal retail was only around 12%.
Retailers also face logistical problems because of the country's
geo-political isolation. Hostile relations with Azerbaijan and Turkey
mean that two of Armenia's international borders are closed, and Iran
is under international sanctions, meaning that around 80% of Armenia's
international trade is through Georgia. Combined with relatively low
spending power, this has held the international chains out until now.
http://www.bne.eu/story4549/Armenian_PM_wades_into_Carrefour_row
Feb 14 2013
Armenian PM wades into Carrefour row
Clare Nuttall in Astana
February 14, 2013
The Armenian government says it's set to help Carrefour resolve a
dispute that has delayed the French hypermarket giant's entrance to
the country, in a bid to prevent the country's investment climate
being harmed further by the affair.
As the first international supermarket chain to try to crack the
Armenian market, Carrefour is running up against the power of local
oligarchs who want to keep control of the lucrative food retail
market, say reports. However, Armenian Prime Minister Tigran Sargsyan
has come out in favour of the French retailer, which could pave the
way for Carrefour to open its first store in Yerevan this year.
On February 7, Sargsyan told journalists that, "Carrefour must be
opened in Armenia for sure. I had a meeting with Carrefour
representatives, and we discussed all the issues related to the
entrance of the network to Armenia and its normal operation here.
Armenia is quite interested in providing people with Carrefour's
services," Sargsyan told journalists, Arka reported.
Sargsyan said that the company's delayed entrance to Armenia was due
to disagreements between "private companies" and that his government
had offered to help the company enter the market.
Carrefour's arrival is expected to boost competition, raise demand for
agricultural products and help create new infrastructure, Sargsyan
said.
Carrefour has another supporter in the form of US ambassador to
Armenia, John Heffern, who made his views known over Twitter. "Hear
Carrefour wants to open in Yerevan. I used to shop there in Brussels.
Would be good for competition here. Hope it happens," Heffen wrote.
However, Carrefour's plans are rumoured to have alarmed the owners of
some local chains, which currently dominate the formal retail sector.
Because of its larger purchasing power and proprietary supplier
network, retailers fear Carrfour will be able to undercut them,
potentially putting the handful of local chains that have so far had
the market to themselves out of business - or at least slash their fat
profit margins.
Earlier in February, Armenian newspaper Zhamanak cited sources as
saying that the owner of Dalma Garden Mall, oligarch Samvel
Karapetyan, had suspended the agreement to lease space in the mall to
Carrefour. There are also reports that the space may be leased instead
to Yerevan City, a chain of supermarkets owned by Armenian businessman
and MP Samvel Alexanyan, who is also the owner of Fleetfood, Armenia's
largest importer of wheat, sugar, alcohol and cooking oil.
Opening day
Carrefour's arrival in Armenia has been anticipated for more than a
year, and the first store was expected to open in late October 2012 -
a month after Majid Al Futtaim Holding, the operator of the Carrefour
brand in the Middle East and Central Asia, launched the first
Carrefour in neighbouring Georgia. Carrefour executives have
reportedly been trying for several months to meet with top government
officials in an attempt to break the impasse.
In an emailed statement, Carrefour's press office told bne that, "in
line with its strategy of developing the Carrefour brand, the Majid Al
Futtaim group continues to analyze the Armenian market and aims to
open its first store in the next 12 months."
Armenia's small retail sector is relatively underdeveloped, and still
populated by local players, among them Star, SAS, Galaxy and Yerevan
City - all of which have emerged in the last decade. The supermarket
and grocery chains have gradually replaced open-air bazaars and street
vendors, as Armenia, like other post-Soviet countries, makes its
transition to a formal retail sector. However, as of 2012, the level
of formal retail was only around 12%.
Retailers also face logistical problems because of the country's
geo-political isolation. Hostile relations with Azerbaijan and Turkey
mean that two of Armenia's international borders are closed, and Iran
is under international sanctions, meaning that around 80% of Armenia's
international trade is through Georgia. Combined with relatively low
spending power, this has held the international chains out until now.
http://www.bne.eu/story4549/Armenian_PM_wades_into_Carrefour_row