The Competition Commission of India has approved UK-based retail company Tesco's purchase of 50% stake in Trent Hypermarket owned by the Tata Group.
Tesco was the sole applicant for putting foreign direct investment in the multi-brand retailer.
After studying Tesco's case, the competition watchdog said that there was no overlap in the business activities of Trent Hypermarket and Tesco Overseas and therefore it would not have any 'appreciable' adverse effect on competition in India.
Trent Hypermarket is engaged in the business of multi-format retail trading in India including hypermarkets, supermarkets and smaller convenience stores with 16 retail stores across India. While Tesco Overseas Investments a subsidiary of Tesco Plc is not present in the retail market in India it is the holding company for several of the Tesco Group's overseas retail businesses globally.
In 2008, Tesco Group, through one of its entities, Tesco Hindustan Wholesaling Private Limited entered into a wholesale supply agreement with Trent Hypermarket to supply merchandise to its retail stores.
The ruling Bharatiya Janata Party has maintained its stance on FDI in multi-brand retail. "It is probably is not best opened up now because medium and small sized traders or small farmers have not been adequately empowered," new Commerce and Industry Minister Nirmala Sitharaman had said.
Government has allowed 51% FDI in the multi-brand retail.
© 2014 - European Supermarket Magazine by Enda Dowling
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