The Moroccan government has threatened to close down the Turkish supermarket chain BIM in the country unless it increases the proportion of local goods. BIM has 500 branches in Morocco, the largest of its two markets in Africa.
There are several factors at play: Morocco has a $2bn trade deficit with Turkey, and is in the process of the free trade deal the two countries signed in April 2004. The second issue is the impact on small shops: Trade Minister Moulay Hafid Elalamy told members of Moroccan parliament that “wherever they open, 60 Moroccan shops get closed. The third issue is the acrimonious conflict in Libya, where Morocco and Turkey are backing opposing sides. This is not really about trade. It is about politics.
For its part, BIM has stressed that it sources 85% of the goods it sells in Morocco, and that it employs 3,000 people in the country, most of whom are local. Note that some of this 85% simply means products sourced through Moroccan distributors, rather than products necessarily manufactured in Morocco.
The issue isn’t really BIM, which added 55 stores in Morocco last year and is popular with mostly urban consumers for its low prices, consistency and convenience. We do not know the source of Minister Elalamy’s data that 60 shops close wherever a branch of BIM opens, but the number looks wildly inflated based on international benchmarks, even if it could be calculated. BIM is the third largest supermarket chain in Morocco, and operates in the same cities as the much larger Carrefour/Label’Vie and Marjane – both of whom are contributing to the rapid modernisation of grocery retail in the country.
BIM is being targeted, we suspect, because it is the most visible Turkish business in Morocco. Morocco has submitted a list of complaints to Turkey around trade, including its belief that the importation of cheap Turkish textiles and clothing have cost 44,000 jobs in Morocco.
So there is some bluster coming from Morocco as an opening gambit in trade negotiations. It’s hard to say if the Moroccan government really, truly means what it says because the BIM issue is about challenging a token of Turkish trade dominance, rather than the substance of it. It feels a lot like bluster to us.
If BIM were to close, we would expect the business to be picked up by whoever took over the chain, or by Carrefour/Label’Vie and Marjane. Morocco only accounts for 5% of BIM’s revenues, which is not trivial but not catastrophic either. The real damage would sit on the Moroccan side, because it would send worrying signals to foreign investors about government interference.