French retailer Carrefour has ruffled government feathers again as it has not officially told senior officials of its plans to exit Malaysia.
News first broke in July this year that Carrefour's Malaysian business, together with that in Thailand and Singapore, had been put up for sale for an estimated US$1 billion (RM3.10 billion).
Since then, various foreign and local reports have named bidders and cited progress of the bidding process.
To date, no Carrefour officials have come forward to deny or confirm any of the reports.
However, the secretary-general of the Ministry of Domestic Trade, Co-operatives and Consumerism, Datuk Mohd Zain Mohd Dom, said that if the Carrefour business here was indeed up for sale, his ministry should have been informed.
"We have not got any official communication from them to say that they are selling. So, as far as we are concerned, we are only listening to (news) from the market telling us something is happening.
"But Carrefour should come out and inform the government (if the stores here are up for sale). Because, under the guidelines, any takeover will have to get the approval of the government," he told Business Times.
Mohd Zain cited Makro Cash & Carry Distribution Sdn Bhd, which upon plans to exit the country, informed the ministry of its intention. Makro and Tesco Stores (M) Sdn Bhd then informed the government that the latter would buy Makro's business here.
"Carrefour has yet to let us know. Carrefour should respect the process under the guidelines," Mohd Zain said.
Malaysia has strict guidelines governing the expansion of foreign hypermarkets to protect smaller local retailers.
In Malaysia, Carrefour has 23 hypermarkets. Hypermarket licences are given out based on population count and this has hit the limit. This scenario makes it difficult for players to expand.
It is not the first time that Carrefour has upset the ministry.
It had previously skirted a government rule by opening a smaller store, called Carrefour Express. They were first called franchised stores, then later termed licensed stores.
Foreign hypermarket operators here are not allowed to open outlets which are less than 2,000 sq m each. Carrefour's move did not please the ministry and the matter remains unresolved.
Sources said the government was also disappointed with Carrefour over another incident in which it opened a store that also did not adhere to the size ruling. But it is believed that this has been settled.
Since then, various foreign and local reports have named bidders and cited progress of the bidding process.
To date, no Carrefour officials have come forward to deny or confirm any of the reports.
However, the secretary-general of the Ministry of Domestic Trade, Co-operatives and Consumerism, Datuk Mohd Zain Mohd Dom, said that if the Carrefour business here was indeed up for sale, his ministry should have been informed.
"But Carrefour should come out and inform the government (if the stores here are up for sale). Because, under the guidelines, any takeover will have to get the approval of the government," he told Business Times.
Mohd Zain cited Makro Cash & Carry Distribution Sdn Bhd, which upon plans to exit the country, informed the ministry of its intention. Makro and Tesco Stores (M) Sdn Bhd then informed the government that the latter would buy Makro's business here.
"Carrefour has yet to let us know. Carrefour should respect the process under the guidelines," Mohd Zain said.
Malaysia has strict guidelines governing the expansion of foreign hypermarkets to protect smaller local retailers.
In Malaysia, Carrefour has 23 hypermarkets. Hypermarket licences are given out based on population count and this has hit the limit. This scenario makes it difficult for players to expand.
It is not the first time that Carrefour has upset the ministry.
It had previously skirted a government rule by opening a smaller store, called Carrefour Express. They were first called franchised stores, then later termed licensed stores.
Foreign hypermarket operators here are not allowed to open outlets which are less than 2,000 sq m each. Carrefour's move did not please the ministry and the matter remains unresolved.
Sources said the government was also disappointed with Carrefour over another incident in which it opened a store that also did not adhere to the size ruling. But it is believed that this has been settled.
Business Times
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