Hyper tension
Deputies from the Self-defense party have introduced a new proposal for a law that would create a new type of building permit especially for hypermarkets. The new permit, which would also act as a kind of operating permit, would be granted for a period of 10, 15 or 20 years.
"This law is designed to create order with regards to the location and number of new hypermarkets," said Waldemar Nowakowski, a deputy from Self-defense. "There are too many of them, so we just want to equalize the development of all kinds of market players in Poland."
Nowakowski added that while big, international retailers give employment to over 200,000 people, other retail sectors secure around two million jobs.
Keeping it small
The introduction of a periodic element into building permits is not the only limitation Self-defense would like to see established for big retailers.
The party wants retailers who want to open shops totaling more than 400 sqm of space to apply and receive the approval of a mayor or gmina head (wojt), as well as the local parliament for the investment. To establish a store amounting to more than 2,000 sqm, approval from a voivodship parliament would also be required.
According to the Polish Confederation of Private Employees (PKPP) Lewiatan, the proposed law is being used as a tool by small retailers looking to distort the market in their favor.
"It is some kind of paradox that by defining a large-area shop as that with an area of more than 400 sqm, an owner of 1,000 shops each with less than 400 sqm would not need any permit, while an owner with only one shop larger than 400 sqm would have to obtain a permit," says Krzysztof Kajda of PKPP Lewiatan.
"It could also force someone who wishes to open a shop or market larger than 400 sqm to apply for such a permit, even if the proposed site is already within an existing shopping mall or gallery," he adds. "This is a punishment for conducting particular activities and creating a certain market structure."
Space race
As one of the new criteria for granting building permits for such projects, lawmakers stated that the investments will have to be included in the gmina's spatial-development plan.
"In reality such an obligation means actually blocking the investments, since most of Poland's gminas do not posses a spatial development plan," says Kajda.
Kajda describes the situation as a breach of constitutionally guaranteed economic freedom. He says that if the new law comes into the force, employers in Lewiatan would bring the case in front of the Constitution Tribunal.
"If the 400-sqm limit were introduced, all those who have entered Poland's market with particular investments will focus on small formats," says Andrzej Maria Faliński from the Polish Organization of Trade and Distribution.
Faliński also says that the restrictions proposed by Self-defense could limit the number of new local and international investments. He says that the periodic permits are absurd, and believes they will discourage investors from building stores, especially shopping centers, as well as any facility over 2,500 sqm.
Currently, local authorities decide what kind of shopping development they want to have on their area. If the proposed law comes into effect, entrepreneurs believe bureaucracy will be greatly increased.
"Whether we like it or not, this might encourage corruption," Faliński warns.
Market players prepared
Consolidation in the retail market has been visible for the past several months, and most have been expecting new regulations to deal with the situation. Some large retailers are already changing their style. Recently Carrefour announced the introduction of a new, smaller shop format called Carrefour Express, though it says this is not due to any expected regulatory changes.
"We always adjust our market actions to the law that currently exists, and not to some unclear predictions," says Alain Souillard, president of Carrefour Polska.
Souillard admits that Carrefour does not plan to open big hypermarkets as the smaller-shop format will be the company's main focus. The shops will consist of 800-2,000 sqm and will be located within areas with a small number of hypermarkets and a population of 10,000 to 15,000.
"To put this idea into action, 45 Champion supermarkets will be re-branded to Carrefour Express in 2007," Souillard says. "In 2008, the same thing will happen to all Globi supermarkets."
"Our new plan has not been established because of some law that could be introduced, but only because we see it as a good way to develop our company in Poland and this is our economic choice," he adds.
Regulatory repeat?
The current proposal is not Self-defense's first attempt to limit the number of new super- and hypermarkets in Poland. Previously, the party requested a total ban on the establishment of stores bigger than 400 sqm within gminas with a population of less than 15,000. But that proposal was rejected by the government of the former Prime Minister Kazimierz Marcinkiewicz.
"The government supports the idea of limiting the expansion of large-area shops. However, the government believes that the proposed regulation would make it more difficult to initiate business activity," read an official statement from the Marcinkiewicz government.
However, this time the bill was placed in the coalition agreement between Self-defense and Law and Justice and is expected to be voted on in the Sejm before the end of 2006.
