Malaysia to review foreign hypermart rules

The Ministry of Domestic Trade and Consumer Affairs is proposing that guidelines governing the expansion of foreign hypermarkets in Malaysia be reviewed as the business environment has changed over the years.

"Some of the conditions that were there during the time when the Cabinet discussed and issued the guidelines (several years ago) have now changed," Minister Datuk Shahrir Abdul Samad said, adding that the ministry will prepare a paper on the matter to be discussed in Cabinet.


SOCIAL DUTY: A representative of Carrefour giving out Deepavali gift. Looking on is Shahrir (right)

Speaking to reporters at "Deepavali with Carrefour" in Subang, Selangor, yesterday, he said hypermarkets like Carrefour, Giant and Tesco have had an impact on prices, spending, employment and investment in the country.

"As far as the Cabinet is concerned, there is a great deal of interest and support for the presence of hypermarkets," Shahrir said.

He said based on the ratio of hypermarket to population, "theoretically, there is no need for any more hypermarkets", but there continues to be interest by foreign hypermarkets to invest and open new outlets.

The ministry, since 2001, has introduced several guidelines to control the expansion of foreign hypermarkets and protect mom-and-pop stores.

The most stringent rule was a five-year freeze beginning January 2004 on openings in Kuala Lumpur, Shah Alam and Petaling Jaya in Selangor, Penang and Johor Baru. It is unclear whether this ban is still in force.

Other rulings include the application for building a hypermarket be submitted two years in advance and before the land is purchased. The government also requires that an impact study be done in a 3.5km radius from the identified location of a hypermarket.

These rules were incorporated into the Guidelines on Foreign Participation in the Distributive Trade Services 2004.

In his speech, Shahrir said the fall in global crude oil prices, which has also seen a decline in prices of some commodities and fuel pump, should see the prices of goods on the shelves come down in the next four to five months.

He said there will be an announcement on the price reduction for one food item this Friday, but declined to elaborate.

By New Straits Times (by Vasantha Ganesan)