VILNIUS - The head of Rimi's Lithuanian operations said that the chain wants to buy a rival grocery chain as a way of boosting its presence on the Lithuanian market, where VP Market dominates.
"Rimi has long-term and ambitious plans in the Baltic states: leadership in the Baltic countries and a strong second position in the Lithuanian market," Rimi Lietuva CEO Paulo Peereboom told the Verslo Zinios daily.
"We can't give any specific names at this point, but I can assure you that it will be a surprise to the market. Let me remind you that our main objective is leadership in the Baltic retail trade market," he said.
Speculation is focused on Palink as a likely acquisition, but officials from the company were quick to refute any such scenario, citing their own expansion plans. Palink CEO Aidas Mackevicius said that they were not negotiating with Rimi and were instead concentrating on building their own network of stores.
Palink operates 73 grocery stores, of which 17 are in Latvia. By contrast, Rimi Lietuva, which is Scandinavian owned, currently has 47 stores, up from 30 stores last year, and plans to open three more this month, including two Supernetto discount stores and a Rimi Hypermarket in Lithuania.
Palink's Mackevicius explained, "We are buying the Viciunai retail chain, which comprises 11 stores. Our further expansion in Lithuania will be more carefully targeted to prevent over investment. We will expand into those regions where we do not have any stores yet. But our near-term priority is expansion in the Latvian market."
Other industry insiders threw doubt over Rimi's ambitions. In the words of Dainius Dundulis, CEO of the Norfos Mazmena grocery chain, "They may be willing to buy rival chains, but unless there is somebody willing to sell their business, such statements by the head of Rimi Lietuva mean nothing."
Dundulis said that Norfos Mazmena had not held any talks with Rimi.
Aibes Mazmena CEO Audrius Lescinskas also denied that there were any offers to buy the Aibe grocery chain. "Our chain is comprised of legal entities, so it is impossible to acquire the entire chain. There may be talks with a small chain of stores within our group, but I don't know of any such talks. I think we would know if there were any," he said.
Meanwhile, the Latvian Competition Council announced on Sept. 11 that the largest retailers in the country were Rimi Latvia and VP Market, with each controlling over 30 percent of the retail grocery market.
Competition Council representative Sanita Kupla said that the data was calculated based on the total market of retail chains selling daily necessities and sales cooperatives uniting non-specialized stores selling mainly food, as well as net sales of the given retail chain in a specific accounting period.
Rimi Latvia has 85 stores in Latvia, and the Lithuanian-owned VP Market runs 103 stores in Latvia.
Rimi Latvia's six-month sales this year reached 136.6 million lats (194.3 million euros), growing 19.8 percent from the same period last year, and its annual sales in 2005 amounted to 243.2 million lats.
In January-June this year VP Market reported 157.4 million lats in Latvian sales, a 27 percent rise year-on-year.
Rimi Latvia is a Latvian subsidiary of Rimi Baltic, a joint venture set up by Scandinavian retailers Kesko Food and ICA Baltic. Lithuania's VP Market is the largest retail company in the three Baltic states.