Reliance Rodeo hits a roadblock

Ashok Sinha (name changed), who quit his regular job in a pharmaceutical company and took a Reliance Fresh franchise in Lucknow in the hope of a better future, is in a spot. “The first day that we opened the store, violent protests forced a shutdown,” he laments. Following the closure orders in UP, Reliance Fresh has had to fire over 1000 employees in Lucknow, Meerut, Kanpur and Bareilly and put its UP plans on hold. Ashok is not alone, the group has sacked over 400 employees even in West Bengal (4Ps B&M has learned that Reliance will wind up its project in the state). Here, the Ambani army has been browbeaten by Forward Bloc and other left partners, with under construction outlets being ransacked by agitating mobs.

Explains, Ashoke Ghosh, State Secretary of All India Forward Bloc, “We can’t allow any FDI or large scale investor in agriculture related business, which may harm the interests of poor farmers or small businessmen.” In Kerala, the Kerala Vyapari Vyavasayi Ekopana Samithi (KVVES) and CPM are up in arms against super-market chains, including Reliance. Says Pinarayi Vijayan of CPM, “There is no question of allowing monopolists to enter the retail sector in Kerala, come what may.” Ironically, inaugaration of Reliance Fresh outlets in Kochi by a CPM MLA and the Dy. Mayor stirred a hornets’ nest, and both had to apologise later. Reliance operates three outlets in Kochi, Fabmall (Trinethra) 28, Spencers 1, while Subhiksha is waiting in the wings. KVVES plans to hold district and state level conventions this month for chalking out future strategies. Even in Orissa, where Mukesh Ambani had made Rs.30 billion investment plans, Reliance Fresh ventures have hit a roadblock with protests from small time traders. Reliance had to take help of the police and the stores were subsequently closed.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative