The famous SPAR retail brand is poised to enter the Chinese mainland thanks to a major licence agreement it has signed with Shandong retailer Jia Jia Yue Supermarket Co Ltd to establish a joint venture.

"The agreement will result in 15 new SPAR hypermarkets in East China's Shandong Province in the next three years," said Gordon Campbell, managing director of SPAR International at the signing ceremony in Shenzhen in the southern Guangdong Province.

The agreement also makes China the fourth country in Asia to join SPAR after Japan, Singapore and India.

Operating in over 30 countries, Amsterdam-based SPAR is the world's largest retail food store chain with nearly 16,000 stores and retail sales of 268 billion euro (US$341 billion).

SPAR International recently won approval from the Ministry of Commerce to conduct business in China.

Food retailing in China has made enormous progress in recent years with independent retailers reaping rewards for providing quality service, said Campbell.

"Now the time and market situation is perfectly right for SPAR to participate in this transition."

After the other two major chain store business types company-owned and franchise had gained momentum in China, the voluntary company-in-chain store is expected to play an important role in the Chinese retailing industry.

Zhang Zhigang, vice-minister of commerce, said that voluntary company-in-chain stores will improve the management of small and medium-sized enterprises (SMEs) and reduce their business risks by changing the rivals into co-operative partners.

So far, Jia Jia Yue Supermarket Co Ltd and SPAR International have already identified 15 sites, many of which exceed an area of 10,000 square metres.

According to the agreement, the ownership and management of the joint venture will be entirely Chinese. "Our role is to systemize the operation more effectively to compete with multinationals," stated Campbell.

Having grown from a sugar and liquor purchasing and supplying station in the city Weihai of Shan-dong Province, Jia Jia Yue has over 120 food chain stores .

"The co-operation with SPAR will provide Jia Jia Yue with the most advanced management experience and the latest information techno-logy," said Wang Peihuan, president and general manager of Jia Jia Yue.

Editor: Olivia