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Last Updated: Tuesday, 28 August 2007, 17:45 GMT 18:45 UK
Indian retail chain closes stores
Reliance Fresh store
Reliance has massive expansion plans in West Bengal
An Indian retailing firm operating Western-style supermarket stores has closed its stores in Communist-run West Bengal state after a spate of attacks.

Reliance Retail stores have been attacked by supporters of left-wing parties in the past fortnight.

Raghu Pillai of Reliance Retail said stores has been shut down temporarily to protect the firm's properties and its employees.

Last week, the company's stores in Uttar Pradesh state were also attacked.

Reliance plans to invest some $500m in opening more than 100 such supermarket stores, five distribution hubs and 14 collection centres across West Bengal.

Expansion halted

Although the biggest party in Bengal's ruling Communist coalition, the Communist party of India (Marxist), agreed to allow the stores to operate, one of its allies, Forward Bloc, has joined hands with the opposition parties to oppose the plan.

Shaken by the attacks, Reliance Retail said it was shutting its shops and putting expansion plans on hold in West Bengal.

"We want to protect our company's properties and we have to ensure the safety of our employees. So we cannot open our stores at the moment", Raghu Pillai said.

A Reliance store shut down in West Bengal
Opponents says Reliance threatens the livelihood of small traders

West Bengal's ruling left-wing government promised "adequate police protection" to all Reliance Retail stores after the company announcement.

"All their stores will be guarded by police and those involved in violence against their stores will be booked, regardless of which party they belong to," Bengal chief secretary Amit Kiran Deb told a news conference on Tuesday.

The Forward Bloc welcomed the Reliance decision.

"This is a victory for the working class, the toiling peasants and the small traders involved with retail of agricultural products," said party leader Ashok Ghosh.

The leader of the state's main opposition Trinamul Congress party has also opposed these stores.

"More than 100,000 poor people in our state make a living from retail of agricultural products. We cannot take away their living by allowing big companies like Reliance to enter the sector," Mamata Banerjee said.

West Bengal Industries Minister Nirupam Sen said the government was working on ways to solve the crisis.

"Reliance has not cancelled their plans. We will have to find a way to solve this problem and we will do it," said Mr Sen.

Protests

Last week, the government in the northern Indian state of Uttar Pradesh ordered the shutting down of 30 Reliance stores, citing reasons of law and order.

The opening of stores in the state sparked protests, and some of the stores were ransacked by a group of local traders.

Reliance stores, which sell fresh vegetables, fruit, flowers and other groceries, are a hit with consumers, correspondents say.

Across Indian cities and towns, brand new supermarkets are rapidly cornering a slice of what is a huge market.

Opposition to these stores mainly comes from the small traders and middlemen who fear that they will be edged out of the market by big supermarket chains like Reliance.

Reliance Fresh is owned by Bombay-based industrialist Mukesh Ambani who has announced that his company will invest $2bn (80bn rupees) in the agri-food retail network in Uttar Pradesh, India's most populous state.




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