REGULATION;RETAIL RULES STOKE RAGE IN SPAIN'S LARGE STORES

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In Spain, where "hyper-bashing" wins votes in regional elections, several regional governments are proposing increasingly restrictive retail measures before the national election March 3.

In recent weeks, the central and regional autonomous governments' restrictive measures have hurt the largely French-owned hypermarket companies, which plan to fight in the courts.

Spain's Commerce Law, passed Dec. 21, will allow negotiations in 2001 on modifying large retailers' opening hours, restricted severely in 1994 to allow small retailers to modernize and become more competitive.

The Commerce Law also demands a new license for large retail development, a ban on selling below cost and a restriction on inventory sales periods.

Catalonia, the first regional government to propose new limits, introduced a two-year moratorium on large retail developments to help small retailers. The period will expire soon, but Catalonia is now commissioning a one-year study of its retail needs, during which no new retailer licenses will be awarded.

Spain's national large retailer association, the Asociacion Nacional de Grandes Empresas de Distribucion, calls these measures unconstitutional and is preparing a legal case.

French companies Continente, owned by Promodes, and Alcampo, a subsidiary of Auchan, plan legal action. Continente recently won a ruling against rejecting its plans for a development, and Alcampo has been negotiating for a new outlet for 71/2 years.

Marks & Spencer, London, and Hipercor, Madrid, also have projects suspended as Valencia and Galicia announced similar studies and restrictions.

Hope among large retailers for a national victory by the conservative Partido Popular were deflated in late January by a statement from the opposition Commerce spokesman, Ramon Aguirre, who indicated his party's support for the small retailer.

Spanish stockbroker FG indicates that such policies attract voters in vain, as 27,000 of Spain's 57,758 small food retailers will vanish within 10 years.

German hard discount giants-smaller retailers offering a limited amount of generic goods at discount prices-include Rewe, Lidl and Tengelmann. All plan rapid expansion in Spain, leading to new demands for controls on such operators.

Last year, hypermarkets claimed 31% of the food market, while traditional retail outlets had 13%; self-service stores, 12%; and supermarkets and discount stores, 44%.

New controls are also under consideration in Portugal and France. A new free-market lobbying group has been established by large European retailers including France's Carrefour and Promodes; England's Tesco and Marks & Spencer; Belgium's GIB and Delhaize; the Netherlands' Ahold; and Germany's Tengelmann.

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