Rustan's in talks with French retail giant

The Rustan's Group is in negotiations for a possible partnership with the French retail giant Carrefour SA, marking what could be the first tie-up between a local retail company and a foreign investor since the enactment of the Retail Trade Liberalization Law.

In line with this, retail trade industry leaders are asking government to expedite the release of the law's implementing rules and regulations (IRR). Otherwise, the said retail industry will miss opportunities to tie up with foreign retail groups.

According to former Senator and Trade Secretary Vicente Paterno, Rustan is now talking to Carrefour but he did not say whether the two retail companies are discussing a joint venture project or a project-specific tie-up.

Carrefour is a French supermarket giant which merged recently with another French retail chain, Promdes SA. This merger made Carrefour the second biggest super retailer in the world, with dominance over the European markets where the world's number one, Walmart, has little presence.

According to Paterno, who is now chairman of the 7-Eleven Group, Rustan and Carrefour already have a technical working relationship and a possible joint-venture or partnership will just be a natural development in their business relationship.

Carrefour's entry will boost Rustan's supermarket and department store chain. At present, the group has branches in Alabang, Makati, Mandaluyong, Manila, Quezon City.

"But the government has to come up with the IRR as soon as possible or none of these mergers and ventures would materialize," Paterno said.

Paterno said another foreign retail giant, Royal Ahold NV, is also looking for partners in the Philippines for the development of a chain similar to the Makro wholesale club.

Both Royal Ahold and Makro are Dutch companies. Makro operates in Indonesia while Royal Ahold has a strong presence in Southeast Asia. Since the law was passed, at least four foreign retail trade chains have expressed interest in forging partnerships with local retail companies to take advantage of the liberalized environment.

According to the Department of Trade and Industry, a number of companies have sent feelers that they would come in, led by Walmart, Seiyu of Japan, the Hong Kong-based Wellcome and Royal Ahold.

DTI said the Wellcome chain is being brokered by the Jardine Group to take advantage of the opening up of the Philippine retail trade industry.

Seiyu of Japan, on the other hand, is a sister company of Seibu, a higher-end retail trade chain in Japan. The department said the company is also exploring the prospects of locating in the Philippines, posing the first serious competition for the Rustan's Department Store chain.