Public outrage over approval for CP Group's acquisition of Tesco Lotus

[webfact]

Public outrage over approval for CP Group's acquisition of Tesco Lotus 

By The Nation

 

Nipon Poapongsakorn, distinguished fellow at the Thailand Development Research Institute

 

Academics and netizens have expressed their frustration after the Office of Trade Competition Commission (OTCC) approved conglomerate Charoen Pokphand's acquisition of retail giant Tesco Lotus.

 

The commission voted 4:3 in favour of the US$10-billion takeover deal.

 

The OTCC on Friday gave the green light to CP Group’s deal to buy Tesco Stores (Thailand).

 

“The decision fails to build trust among consumers and other parties, as it can potentially damage trade competition,” Nipon Poapongsakorn, distinguished fellow at the Thailand Development Research Institute, told the Nation on Sunday.

 

“It is not in line with the spirit of the competition law, which aims to prevent companies having market dominance to unfairly enjoy an advantage over other competitors,” said Nipon, a former member of the competition committee when it was under the supervision of the Commerce Ministry.

 

It reminded him of the past two disputed cases when a giant alcoholic beverage company forced small shops to buy its beer by bundling it with liquor products, and the former cable network operator, UBC Cable TV, which charged excessively high fees from subscribers, Nipon said.

 

The two cases damaged the reputation of the competition committee, leading to legal amendments that paved the way for creating the current independent trade competition commission.

 

“In the controversial CP case, the majority of the commissioners failed to take into consideration the possible risky behaviour of the powerful companies in the future,” Nipon lamented.

 

He pointed out that the commissioners apparently failed to carefully look at the big picture where CP, via the 7-Eleven convenience store chain, and its targeted acquisition of Tesco Lotus, can dominate in all three market segments: wholesale, discount, and convenience stores.

 

CP Group already operates 7-Eleven convenience stores and the Siam Makro chain, a wholesale trading business.

 

In some provinces, their combined market share would be between 80 to 90 per cent, he said.

 

He also does not agree with the seven conditions set by the commission. These are minor issues, he said.

 

"The important condition they should have set is prohibited the group from opening new stores in provincial areas,” he noted.

 

He urged the commission to release the full details of their decision and the individual opinions both of those who voted for and against the acquisition.

 

It is unusual for the commission to not release much details when the OTCC issued a press release on Friday, he noted.

 

Sakon Varunyuwatana, chairperson of the commission, who voted against the decision said that the individual opinion of the minority commissioners would be released soon.

 

Suppliers, or small and medium-sized enterprises are adversely affected by the decision and they could lodge a complaint in the Administrative Court, he said about the next legal procedure.

 

They, however, must, convince the court on how it would damage their businesses, he added.

 

Netizens expressing their opposition via social media have also cited their concerns about the potential of rising prices of goods and how the bargaining power of suppliers and small businesses, in particular, could be affected.

 

Source: https://www.nationthailand.com/business/30397580

 

-- © Copyright The Nation Thailand 2020-11-09

 

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[CorpusChristie]

I am furious about this , really annoyed 

[sammieuk1]

Corruption cartel rotten to the core high prices no competition no choice of products stuck in the third world big backhanders rule the day ????

[Hawaiian]

Lack of competition never benefits the consumer.

[Grumpy John]

"Office of Trade Competition Commission "  The clue is in the name.  There is no Fair between the of and Trade.....

[Donutz]

This regime and 'independent organisations' arw a bad bad joke. Not exactly serving the people. No surprise really but sad nonetheless.

[colinneil]

Why are the public outraged?

It was a forgone conclusion that CP would be given the go ahead.

CP can do anything they want, no way will this so-called government oppose anything they do, money, money, money, thats all that matters.

[mark131v]

38 minutes ago, Donutz said:

This regime and 'independent organisations' arw a bad bad joke. Not exactly serving the people. No surprise really but sad nonetheless.

 

Oh I don't know they are definitely serving some people, unfortunately it's mainly the very, very rich and themselves

 

Scumbag's really but did we ever expect anything different and there will shortly be some western born people on here telling us it's a good thing like they have on the other topic on the subject...

[scorecard]

2 hours ago, Hawaiian said:

Lack of competition never benefits the consumer.

and perhaps even worse it's why conglomerates get richer / the rich get richer, and the poor get poorer because they have little option but to pay through the nose for many products, all reducing their meagre spending power, their ability to buy a home, get better education etc.

[mark131v]

3 hours ago, webfact said:

In some provinces, their combined market share would be between 80 to 90 per cent, he said.

 

Yes that's not a monopoly that is an absolute licence to print money and completely control every part of the market, no monopoly here, nothing to see...

[quake]

Sure its very bad

But all the people who are outraged, are just jealous

because they are not the owners and stinking rich.

TIT.

[MasterBaker]

who are those academics i am hearing every day about? is it better just to close all stores and lay off all workers? hello, academics, what do you think?

[klauskunkel]

4 hours ago, webfact said:

He pointed out that the commissioners apparently failed to carefully look at the big picture where CP, via the 7-Eleven convenience store chain, and its targeted acquisition of Tesco Lotus, can dominate in all three market segments: wholesale, discount, and convenience stores.

That's not true. The commissioners received the big picture in three brown envelopes...

[rupert the bear]

what ya mean the big picture?it was a big brown envelope!

[scorecard]

5 minutes ago, quake said:

Sure its very bad

But all the people who are outraged, are just jealous

because they are not the owners and stinking rich.

TIT.

I don't buy that.

There are plenty who want the current outrageous gap in income strongly reduced. 

 

Currently Thailand has the biggest gap in the world regarding the gap in income. 

[scorecard]

1 minute ago, scorecard said:

I don't buy that.

There are plenty who want the current outrageous gap in income strongly reduced. 

 

Currently Thailand has the biggest gap in the world regarding the gap in income. 

 

[Oldie]

23 minutes ago, scorecard said:

I don't buy that.

There are plenty who want the current outrageous gap in income strongly reduced. 

 

Currently Thailand has the biggest gap in the world regarding the gap in income. 

I wouldn't complain too much about this. If labor costs increase to western standards then Thailand will get very expensive. These low labor costs are the reason why Thailand is still somehow affordable. I wouldn't call Thailand cheap anymore. Many products here are more expensive than in my home country. 

[AhFarangJa]

I cannot believe people are surprised, it was a foregone conclusion..........

CP - Corrupt Practices

[JusticeGB]

Rich people/companies get what they want because they have deep pockets and a lot of influence. Pointless referral to any "Independent Commission" they should be called the "Official Brown Envelope Collection Commissioners".

[fangless]

57 minutes ago, scorecard said:

I don't buy that

They did with brown envelopes!

[bluesofa]

2 hours ago, mark131v said:

Oh I don't know they are definitely serving some people, unfortunately it's mainly the very, very rich and themselves.
{snipped}

'they are definitely serving some people,'   Only the ones in the 7 Eleven queue -  in order to make even more money.

[Ian C HH]

1 hour ago, MasterBaker said:

who are those academics i am hearing every day about? is it better just to close all stores and lay off all workers? hello, academics, what do you think?

That’s not the right question. Even if CP don’t buy that doesn’t necessarily mean Tesco Lotus would close down. There are other alternatives, one- broken up and sold to smaller investors. ( this would increase their cost of operation and thus their attractiveness. Two- sell enbloc to another single buyer in completion with CP 

So the CORRECT question is - was their any OTHER buyer. 

[scorecard]

2 hours ago, scorecard said:

and perhaps even worse it's why conglomerates get richer / the rich get richer, and the poor get poorer because they have little option but to pay through the nose for many products, all reducing their meagre spending power, their ability to buy a home, get better education etc.

Another point, this is why I like some aspects what could be called socialism:

 

- Gov't puts maximum prices on some products.

- Prices are controlled by 'reasonable price' processes.

- Some gov'ts are trying to develop laws which control the gap e.g. salary & benefits of managerial staff cannot be more than 3 (?) times salary of labour staff. 

 

[BKKBike09]

This juxtaposes neatly with an article in "the other newspaper" today, which cited Bank of Thailand research stating that the top 5% of companies by revenue account for 85% of Thailand's business sector revenue. Encouraging economic diversity is not a priority.

 

 

[CrunchWrapSupreme]

Expect to see more Lambos screaming down Sukhumvit, driven by the grandchildren of a certain, ridiculously wealthy Thai-Chinese dynasty, just as older ladies lug away supplies from Makro and Lotus hoping to make their 300 baht a day.

[whaleboneman]

6 hours ago, webfact said:

Sakon Varunyuwatana, chairperson of the commission, who voted against the decision

No Mercedes for him then.

[Andrew Dwyer]

Nipon Poapongsakorn, distinguished fellow at the Thailand Development Research Institute

Couldn’t they have found someone with a job description to comment on this ??

[reptile91602]

Sound like these guys  have studied american strategies and love it. Conglomerates owning everything in their business sectors. No competition, no problem.

[worgeordie]

All CP did was buy back an asset they used to own, when they sold it to Tesco

after the 1997 financial meltdown in Asia.

 

They now control food products in Thailand, from manufacturing, wholesale,

and many retail outlets ,they have it all covered.

regards worgeordie

[bluesofa]

9 minutes ago, Andrew Dwyer said:

 

Nipon Poapongsakorn, distinguished fellow at the Thailand Development Research Institute

Couldn’t they have found someone with a job description to comment on this ??

What makes him 'distinguished'?  The cut of his jaw? His hair style?