Retailers object to Walmart deal

New Delhi: Small traders body Confederation of All India Traders (CAIT) said that it filed its objection petition in the Competition Commission of India (CCI) against the $16 billion Walmart-Flipkart deal claiming it will create unfair competition and an uneven level playing field for domestic players.

CAIT said the deal would deny market access to non-preferred sellers and impact small traders on offline platform.

“CAIT has strongly objected the merger of two companies and said that Walmart which is world’s largest retailer will create an unfair competition and uneven level playing field and will indulge in predatory pricing, deep discounts and loss funding,” it said.

The petition said that Flipkart is a combination of exclusive tie-ups and of preferential sellers where even online vendors face discriminatory conditions and Walmart being the owner by virtue of 77 per cent share is bound to give preference to its inventory, said CAIT.

There will be denial of market access to non-preferred sellers coupled with complete annihilation of small time traders on off-line platform, it said. “Walmart, arguably world’s largest retailer in the market, would sell its inventory on the platform of Flipkart either directly or through a web of associated preferred sellers with the result that their market share would rise exponentially and pure offline retailers or wholesalers would have two options either exit the market or sell their goods on Flipkart and face discriminatory terms and conditions from Flipkart in comparison to its preferred sellers. This will create an unhealthy competition much to the disadvantage of both offline and online sellers,” said CAIT.

CAIT also alleged that it apprehends that the deal is bound to circumvent established laws and FDI policy of the government “since the ultimate object of Walmart is to enter the retail and in the absence of any policy on e-commerce or retail trade, it would be easy for Walmart to reach out to retail market, which otherwise it cannot enter due to FDI policy.”

Earlier this month, Walmart had announced the acquisition of 77 per cent stake in Flipkart for about $16 billion in the largest e-commerce deal which will give the US retailer access to the Indian online market.