Metro Cash & Carry ownership change unnerves local suppliers

Thien Thanh Sanitaryware joint company



Metro Cash & Carry ownership change unnerves local suppliers

 Berli Jucker Public Company Limited’s (BJC) acquisition of Metro Cash & Carry Vietnam has caused anxiety among Metro’s goods suppliers.

Speaking to the Daily, the director of a fast-moving consumer goods firm, said his firm and many other suppliers of Metro are worried about the new owner of Metro Cash & Carry Vietnam.

Multiple suppliers said they had actually made little profit from supplying goods for Metro as Metro often asked for high discounts.

Goods suppliers first signed contracts with Metro Cash & Carry but for the following contracts, Metro re-negotiated with suppliers on discount rates on an annual basis and discount rates often increased year after year, according to some enterprises.

Thai firm BJC as the new owner of the Metro wholesale center chain spent a hefty 655 million euro taking over this chain.

A couple of suppliers have expressed concern that BJC might choose to bring Thai goods to Vietnam via Metro.

The director of the above fast-moving consumer goods firm said he is waiting for moves by BJC and if BJC actually prioritizes Thai goods, his company would consider switching to a different distribution system.

However, he seems optimistic as he believes that even though BJC puts more Thai products on the shelves of Metro stores, the Vietnamese market would not be flooded by Thai goods.

Other distribution channels of his firm are traditional wet markets and sales agents.

The volume of goods his company provides for Metro accounts for several percents of output and profit is low, but if Metro opened more outlets, the volume would be bigger.

Meanwhile, the director of a company specializing in supplying kitchen utensils believed BIC would prefer distributing Thai goods in Vietnam. If that came true, many suppliers of Metro would suffer.

Nevertheless, he said if Vietnamese consumers still had high demand for local goods, BJC would have no choice but to continue supplying domestic products, instead of selling Thai products only.

According to this director, local products will have to compete with those from Thailand and other ASEAN countries when the ASEAN Economic Community is in place in 2015. Therefore, companies like his have made preparations for a tougher competition.

Currently, prices of Thai products are higher than those of Vietnam’s due to transport costs.

Metro Cash & Carry Vietnam earlier issued a statement saying that all of its operations with 19 distribution centers and properties worth 655 million euros would be taken over by BJC under a deal signed on August 7. The acquisition is expected to be finished in the first half of next year.

BJC is a major distribution, marketing and production firm of Thailand. It has six offices in the Southeast Asian region and earned 42 billion baht in revenue last year, equivalent to 975 million euro.
Tran Thu - http://english.thesaigontimes.vn