Forming group for snack chain gives food for thought

THE LOCAL government in Shaxian county, East China's Fujian province, is trying to establish a group for the fast food chain Shaxian Snack, which has grabbed an increasing share in the domestic market since the 1990s. Excerpts:

Problems are sure to occur before and during the proposed listing of the group being created to control Shaxian Snack. Apart from a relatively low threshold for both skills and initial funding, the majority of its snack bars are run by individuals, leading to dispersed ownership and hence the lack of a dominant and integrated main body. Besides, Shaxian Snack originated at the grassroots level and is a product of the market, while it is the local government that hopes to integrate the individual snack bars into one big corporation. Whether the individual owners will willingly cooperate remains a question. In addition, to some extent, deficiencies may still exist in issues such as the standardization of the upstream supply chain, stock management and financial transparency after the integration.

National Business Daily, Aug 18