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Global Insight
February 14, 2013
Controversy surrounds French supermarket giant's bid to enter Armenian market
by Lilit Gevorgyan
The French supermarket giant Carrefour's brand operator in the Middle
East and Central Asia, Majid Al Futtaim Holding, stated this week that
it is planning to open a branch in Armenia within the next 12 months.
The statement comes at the height of controversy surrounding
Carrefour's bid to enter the lucrative Armenian food market, which is
dominated by local supermarket chains. The French giant will be the
first international supermarket chain to enter Armenia, which would
mean breaking the monopoly of local large food and retail businesses,
particularly those held by the owner of one of the largest Armenian
hypermarkets, Dalma Garden Mall, Samvel Karapetyan, and the
parliamentarian Samvel Alexanyan, who owns Yerevan City, one of the
most successful supermarket chains in the country. Carrefour has
recently opened a branch in neighbouring Georgia but its plans to
expand operations into Armenia have met some resistance local big
businesses. Still, the international supermarket chain has also
received strong backing not only from the US Ambassador John Heffern,
but also Armenian prime minister Tigran Sarkisian. The latter was
quoted by the Armenian Arka news agency as saying, "Carrefour must be
opened in Armenia for sure... Armenia is quite interested in providing
people with Carrefour's services."
Significance:The politicisation of the French supermarket's bid to
enter the Armenian food retail market points at one of the main issues
that the country's business environment faces, namely the influence of
politically connected large businesses over market decisions. While
arguably the local food chains have managed to bring wider and better
services to Armenian consumers, albeit at the expense of small
businesses, their resistance to outside competition, if successful,
could harm Armenia's reputation, also affecting its relatively strong
rating on the World Bank's Ease of Doing Business scale where it
currently holds 32nd place out of 185 countries, placing it ahead of
Belgium, France, Israel and Poland.
From: Emil Lazarian | Ararat NewsPress
February 14, 2013
Controversy surrounds French supermarket giant's bid to enter Armenian market
by Lilit Gevorgyan
The French supermarket giant Carrefour's brand operator in the Middle
East and Central Asia, Majid Al Futtaim Holding, stated this week that
it is planning to open a branch in Armenia within the next 12 months.
The statement comes at the height of controversy surrounding
Carrefour's bid to enter the lucrative Armenian food market, which is
dominated by local supermarket chains. The French giant will be the
first international supermarket chain to enter Armenia, which would
mean breaking the monopoly of local large food and retail businesses,
particularly those held by the owner of one of the largest Armenian
hypermarkets, Dalma Garden Mall, Samvel Karapetyan, and the
parliamentarian Samvel Alexanyan, who owns Yerevan City, one of the
most successful supermarket chains in the country. Carrefour has
recently opened a branch in neighbouring Georgia but its plans to
expand operations into Armenia have met some resistance local big
businesses. Still, the international supermarket chain has also
received strong backing not only from the US Ambassador John Heffern,
but also Armenian prime minister Tigran Sarkisian. The latter was
quoted by the Armenian Arka news agency as saying, "Carrefour must be
opened in Armenia for sure... Armenia is quite interested in providing
people with Carrefour's services."
Significance:The politicisation of the French supermarket's bid to
enter the Armenian food retail market points at one of the main issues
that the country's business environment faces, namely the influence of
politically connected large businesses over market decisions. While
arguably the local food chains have managed to bring wider and better
services to Armenian consumers, albeit at the expense of small
businesses, their resistance to outside competition, if successful,
could harm Armenia's reputation, also affecting its relatively strong
rating on the World Bank's Ease of Doing Business scale where it
currently holds 32nd place out of 185 countries, placing it ahead of
Belgium, France, Israel and Poland.
From: Emil Lazarian | Ararat NewsPress