Rimi owner under doubt

  • 2003-03-06

Due to troubles experienced by the global food retailer Ahold, some suppliers are considering tightening contract conditions for its Lithuanian chain, and experts forecast that Rimi will face problems, too.

"We want very clear guarantees that the Rimi chain will not suffer problems across the Baltic region," Tomas Kucinskas, CEO of Svyturys-Utenos Alus, Lithuania's leading brewery, was quoted by Verslo Zinios as saying.

According to the business newspaper, ICA Ahold, the operator of Lithuania's Rimi chain, has said that the recent scandal surrounding Royal Ahold will not affect the Lithuanian chain's operations.

Royal Ahold's shareholders lost billions of dollars as the company's stock slumped by four-fifths after the group admitted that its U.S. subsidiary had overstated its earnings.

According to Verslo Zinios, Ole Fredrik Holst, director of Rimi Lietuva, is expected to announce in a statement that the disclosure of accounting irregularities at Ahold will not change the Lithuanian chain's plans.

On Feb. 27 the company stated that it would stick to its plans to open 11 new Rimi and Hyper Rimi supermarkets and to invest at least 100 million litas (28.9 million euros) in expansion projects.

Meanwhile, Andrius Stonkus, project manager at the investment banking company Prime Investment, said Ahold's problems would affect the Lithuanian chain in two ways: by slowing down investments and leading to tightened control over company operations.

"In the context of ongoing brand building efforts, this scandal will do no good to Rimi," Stonkus said.

ICA Baltic operates retail chains under the Rimi brand in all three Baltic countries. Its interests in the region intersect with those of VP Market, Lithuania's biggest retail chain.

Ignas Staskevicius, CEO of VP Market, does not rule out the possibility that the rival chain might be split into smaller units and put up for sale.

"We have not received any acquisition offers. Everything depends on the price and the offer. We would be interested in an offer regarding the Rimi chain in Estonia, in which we have only one store," he was quoted as saying by Verslo Zinios.

"Its Latvian chain is of less interest to us because we are competitors there and it would not be reasonable to buy stores located close (to VP Market's stores)," Staskevicius said.

Rimi Lietuva has said that it has around 600 suppliers. In this respect, it ranks third among Lithuanian retail chains.