PM inaugurates ‘ALLE’ wholesale store in Addis
Addis Ababa, 27 May 2014 (WIC) – Prime Minister Hailemariam Desalegn on Monday inaugurated Ethiopia’s modern cash-and-carry wholesale enterprise with the opening of its store in Addis Ababa.
Alle (also known as Ethiopian Trading Enterprise) is a state-owned and privately managed business enterprise which aims to supply food and other consumer goods at a competitive price from nationwide cash and carry stores.
In his inaugural speech, Prime Minister Hailemariam said the enterprise is part of the government’s trade system reform that seeks to create competitive and market oriented business environment in Ethiopia.
The wholesale market in Ethiopia has been dominated by few powerful suppliers and Alle’s introduction is expected to spur more competition into the market and ultimately bring prices down passed on to retailers.
“In the past, consumers were left without options and were forced to accept price inflation due to the unfair business ties between these few suppliers,” Hailemariam said. “We hope the private sector will draw lessons from [Alle’s] unique business model.”
The store inaugurated in Megenagna, located in front of Ethiopian Standard Agency, is the first of chain of stores planned to be opened in the future. Two stores currently being built in Kality and Mercato locations in Addis Ababa are expected to be open soon.
Fully stacked with locally and internationally sourced products, the store’s wide spectrums of customers include kiosks, supermarkets, hotels, restaurants and cafes.
Kebede Chane, Minister of Trade, said the government considered welcoming international giants such as Wal-Mart into Ethiopia but with the interest of protecting the fragile domestic private sector, the government chose to set up a “Wal-Mart-like” domestic enterprise.
In February 2013, the government of Ethiopia awarded the American consultancy firm A.T. Kearney a two and-half-years management contract. A board chaired by Neway Gebreab, chief economic advisor to the Prime Minister, will oversee the operations of the enterprise, which is accountable to the MoT.
“Instead of being a threat to the private sector, this enterprise will work closely with the private sector in a competitive market,” Kebede Chane, Minister of Trade, said.
“The enterprise buys the products directly from manufacturers at home and abroad and thereby avoid the unnecessary market chain which has been driving prices of consumer goods high,” Kebede added.
According to Nuredin Mohammed, general manager of Alle and advisor at the Ministry of Trade (MoT), Alle plans to open 36 stores in 25 major towns across the country in three years.
“This will enable us to have a 25 to 30 percent market share in the country offering products with a five to 10 percent price lower than the competition,” Nuredin said.
Ethiopian officials and A.T. Kearney say the new cash-and-carry would be run as a private business, with some Ethiopians returning from the large diaspora to join the management team. The assortment of products is also expected to expand with the inclusion of vegetable items that require refrigeration.
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