FCBL should focus on wholesale business – DoT

Trade:While the Food Corporation of Bhutan Ltd. (FCBL) still waits to hear from the economic affairs ministry on the issue of the retail business licenses, trade officials said FCBL has to surrender its retail business licenses by this month end as notified earlier.

Department of trade (DoT) officials said as a business entity that is already into wholesale business, FCBL cannot do retail business as it contravenes the wholesale rules and regulations.

About two months ago, the department had issued a notification asking FCBL to surrender all its retail business licenses by this month end. The notification came at a time when FCBL had already set up a retail shop in Pemagatshel but was refused a trade license to operate.

Trade officials said the notification was issued following complaints from businessmen. However, the department didn’t receive any written complaints.

Businesses have been objecting the FCBL’s plan to open a retail shop in almost all the districts reasoning that FCBL was encroaching into their business. On the other hand, consumers feel that if FCBL was able to expand its retail chain nationwide, it will not only benefit the common people, but also bring a paradigm shift in retail business in Bhutan benefiting the consumers.

Records with the trade department show that FCBL has availed 13 retail licenses so far of which six are not operational.

FCBL’s chief executive officer Karma Nidup refused to comment saying that he is yet to hear from the ministries.

Following the notification, FCBL management wrote to the economic affairs and the agriculture ministries. They had said that if FCBL could only continue with the wholesale business, it would contradict their mandate of procuring and distribution of food grains and other essential commodities to the people in line with their charter.

The royal charter mandates FCB to sell goods at a reasonable price and ensure price stabilisation of food grains and other essential commodities through effective procurement and establishment of nationwide distribution network.

However, trade officials said if FCBL’s mandate was to ensure price stabilisation in the market, they should study the market situation well taking into consideration of other retailers. Officials also said that profit should not be FCBL’s motive. “If FCBL had done that, there wouldn’t have been any complaints,” a trade official said. “FCBL should not kill other people’s businesses.”

However, the DoT and the economic affairs minister’s stand on the issue differ.  While trade officials are adamant that FCBL must surrender all its retail licenses and focus on the wholesale business, economic affairs minister Norbu Wangchuk said that the issue was sorted out and that FCBL can continue with its retail business.

“There was a confusion that has now been sorted out,” lyonpo Norbu Wangchuk said.

Trade officials said that the same rules apply for all agencies and people concerned be it a government entity or private. Trade officials also said that when FCBL opened four wholesale depots in Thimphu, Trongsa, Samdrupjongkhar and Mongar, they did so without availing license after which the department intervened.

By Kinga Dema

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