Crackdown On Tesco Lotus, Carrefour, Big C, 7-11

[george]

Thailand Stops Expansion Of Hypermarkets

BANGKOK: -- The Thai government has told foreign hypermarkets and other large retailers to halt their expansion following protests by owners of small independent stores, according to a report by the Financial Times.

A Commerce Ministry official told the paper that the ministry's internal trade department had sent letters to 15 large retailers asking them to suspend their expansion plans until the government can adopt a new law governing the retail sector.

Deputy Commerce Minister Preecha Laohapongchana said the government would temporarily stop all new large retail stores, including those under construction.

The order would affect foreign operators such as Tesco Lotus, Carrefour, Big C and convenience store chains such as CP 7-11.

Large retailers are scheduled to meet government officials for talks next week.

-- kamcity.com 2008-09-08

[steffi]

Such protectionist policies are only bad in the long run for Thailand.

I mean if you give planning permission to build a hypermart and then pull the plug before it's competition you're going to seriously damage the confidence of foreign investors.

[singa-traz]

The investment from retailers was planned more on the smaller format: TESCO Express and 7-11.

Is it protectionnist or a populist decision ? ... good question.

7-11 is also affected ... so ...

[jdinasia]

Before I moved here I HATED the idea of 7/11's ... really I did!

After moving here I changed my mind! Living in an area where the small shops were owned by one ethnic minority and that they only employed relatives etc I have seen 7/11'shire people from ALL groups! kinda cool ...

Not to mention that they invest in the equipment for paying bills etc!

[twix38]

Indeed what a way to carry on. Planning permission given and building ongoing and then government reverses and says STOP! We will tell you when and if you can continue as Sirporn wantyourdosh up the road has complained that you are legally going to operate a storte here!!!

All I really think is wrong is that geovernment can't wing it and change the law retrospectivly at whim. It is what is really wrong in 3rd world countries. Corruption and law changes to suit the whim of the day AFTER all has legally been agreed and signed.

Another shame to Thailand

[jdinasia]

I don't see slowing the expansion of the Big Box stores as a shame .... in the USA theyhave been fighting this battle against WalMart for years!

However WalMart would move into some areas killing the little specialty stores <hardware, plumbing, etc etc> and after those stores were gone and their sales didn't meet projections they woul close the big box store ... leaving the community with nothing!

[ovenman]

BANGKOK: -- The Thai government has told foreign hypermarkets and other large retailers to halt their expansion following protests by owners of small independent stores, according to a report by the Financial Times.

There's not an election coming up sometime soon, is there?

[taxexile]

so now its back to the good old days of out of date stock , no marked prices , no returns , no parking , and less choice of goods.

feel sorry for those half finished stores that will have cost a fortune to start.

wonder what would happen if a wholly thai owned hypermarket business operation started up in the near future?

[kmart]

Typical nationalistic / populist(?) bullshit. Where do you think all yer Mom & Pop fill up the pick ups to sell back @ the moo bahns? That these places are wildly popular indicates normal people are tired of paying inflated prices to some influential person's outlet, with no other choices.

And I love them as well. I pay the same prices *CLEARLY MARKED* as the next guy in line. Great choices at good prices is obviously going against the grain here?

[Crocodiledundee]

I agree with jdinasia.

We have seen the same scenario of expansion

during the seventies in Belgium. As a result of that,

there are no more independent shopkeepers. If you live

on the countryside, you have to drive now to the nearest city

for your groceries. And you will pay a lot for that bar of soap

because there is in no competition at all.

[jdinasia]

Seeing that this is a "temporary" halt .... no need to get all screwed up!

(and I am not sure that I have an opinion on the big box stores .....)

[deminister]

Small retailers have to come to grips with the fact that they do not have a reason to exist anymore. How sad it may sound, nobody want to buy food that is uneatable and over date, and that for a staggering price. If the government thinks that they have a task to protect these people, than they are dead wrong!

If protecting mom and pop stores is the name of the game, than they should force them also to pay their employees a decent salary and they should increase the minimum wage with 30-50%, in that case the construction workers, domestic workers and other hard working people would be able to pay the inflated prices for the old unfresh stuff which is often a health hazard.

Protecting hundred thousand small businesses and daming millions of poor buyers is an unintelligent solution, that comes with any given Thai government, it is almost election date. Let;s see where the consumer protection people are, who made a big deal out of too much choice for air travllers after all they wanted the license of air asia revoked. I bet that we do not hear a ###### thing from them as they are a political party.

[Foggy Bottom]

Lets see now - what did I say back in the spring ........ ah yes - Shin Corp has a monopoly on satellite TV but loses the monopoly and preferential tariffs battle in mobile comms so little brother sells Shin and is sitting cash rich wondering what to do next. He already owns a University and an electronics superstore chain, but is bored.

In 2001 just after coming to power he changed the foreign holding in telecoms laws from 49% to 25% in an attempt to block Orange, and failed to see that their more competitive pricing would win the day, so now while he's cash rich, he's changing the law BEFORE he makes his move this time.

Won't be the first time either - research back to who was education minister and founder of Shim COMPUTER and communications Corp when the schools were told to get PC's in the classrooms - even if they had no electricity - guess who supplied them?

When the Thai Press picks up the connection, this could very well be the end of the Shinawatras - some Thais I've spoken to are already incensed enough to want to torch his uncle's silk businesses here in the north (note to any gov't lurkers - press protection of sources apply - I am a registered FC) even though little brother has no ownership interest in the mulberry worms output.

It's all getting very nasty and underhanded ...... an extended holiday in Baghdad might be a safer place to spend the latter part of this year.

Gaz

[craigt3365]

Too bad. Buying at these places was one thing I really enjoyed. Fixed prices, decent products, great selection. And cheap! Same with 7-11. Never visit them here in the US, but love them in Thailand.

I am visiting my parents in a small town in Nevada. Walmart came in 2 years ago and was fantastic. Before: one small, crappy supermarket that charged outrageous prices. Now: Great selection, great products, great prices. The small store closed down, but the owner made so much money he didn't care and just retired. I know this as he lives near my parents. I don't feel sorry for him at all and neither does anybody else.

Now, there is a battle over Home Depot. And it is the same thing. We drive over an hour into Vegas to shop because the selection here is so small, and expensive, that we have to make the trip. Who is fighting it? The small store owners. Who are quite rich and are overcharging people here. I hope Home Depot wins. It will be good for the residents!

[Thaiquila]

I agree that halting those projects already under construction is massively stupid. As farangs in Thailand, we really benefit from these large chains, mainly because we are treated fairly and equally at those places. I don't agree that the dynamics of these stores is exactly the same phenom as Walmarts in the US, but the part about damaging local retailers sounds similar. Walmart often competes with other quite organized and established large retailers, at least outside of small towns.

[Plus]

I think there are ways to co-exist - people need to drive to Tesco, and fill the whole trunk to make it worthwile. and little things are not worth the trip - that's where your local shop comes in. Be it a couple of beers, a pack of nooldes - whatever.

Maybe superstores need to engage the community in some way - let them have priority in renting places, let them set up night markets etc.

[george]

Full story (The Nation):

Big retailers ordered to suspend all expansions

BANGKOK: -- The Commerce Ministry has ordered all superstores to immediately suspend their business-expansion plans in Thailand to ease concerns among small retailers who have protested against the spread of multinational retailers.

Siripol Yodmuangcharoen, director-general of the Internal Trade Department, said the ministry has sent a letter to all giant retail enterprises asking them to stop new expansion projects. However, only four of the 15 companies in this category - 7-Eleven, Robinson's, Carrefour and Big-C - have replied to the ministry's request, he said.

The halt order will apply until the retail business bill is approved and implemented.

The order came in response to growing protests from local retailers who say they have been adversely affected by the spread of the foreign-owned superstores. On Tuesday, a group of provincial shop owners submitted a petition to the ministry asking it to take action or hundreds of them would surround the ministry.

Siripol said if any giant enterprises disobeyed the order, their representatives would be subject to imprisonment of up to 10 years or a Bt50,000 fine, pursuant to the Commodity Act.

The ministry decided to exercise the power included in the Com-modity Act of 1952 to curb the expansion of giant superstores. The law governs retail and wholesale business expansion, sets restrictions on opening times and sets limits on retail areas.

Deputy Commerce Minister Preecha Laohapongchana said the ministry had sent letters to all major retail enterprises asking them to suspend expansion plans until the ministry found an appropriate way to control the retail sector and help local retailers.

The ministry will today hold a meeting with representatives from giant superstores to sort out the issue.

Meanwhile, at a press conference yesterday, Likit Fahpyochon, former president of the Thai Retailers Association (TRA), said all superstores had fully abided by Thai law in expanding their businesses.

"They open hypermarkets only in permitted areas, and they also honour the laws when opening small outlets," he said.

According to current regulations, hypermarkets cannot open major stores in urban areas, though they are not barred from opening outlets smaller than 300 square metres. That rule has encouraged several multinational companies to change their formats to fit the requirement, Likit said.

Tesco Lotus, for example, has launched the smaller Tesco Lotus Express to abide by the rules.

Likit said the government already had proper regulations in place, including city zoning laws, to prevent multinational retailers from expanding so quickly that they destroy small traditional retailers.

"From the association's point of view, all multinational retailers have strictly followed the local retail regulations. We cannot do anything against them on the issue," Likit said.

He said the growth of the retail sector in Thailand was forecast to slow to between 5 per cent and 6 per cent this year, down from 10-12 per cent last year. The cooling market has caused intense competition among retailers, who have launched aggressive marketing and promotion campaigns to maintain their shares.

The association's members are mostly medium to large-sized retailers.

On Tuesday they submitted a letter to Commerce Minister Somkid Jatusripitak and the Internal Trade Department to express their discomfort over the new bill.

Likit said the bill is biased in favour of suppliers and that the retail association should be given a chance to take part in the drafting. This would ensure that all stakeholders - suppliers, retailers and consumers - would be treated fairly.

"We have no representative on the law's drafting committee, and our opinions have never been heard," said Likit, who is also executive vice president of Central Retail Corporation (CRC).

He said the current drafting committee included state officials and specialists from the Commerce Ministry and the Office of the Consumer Protection Board. Representatives from the private sector are limited to the Board of Trade and the Federation of Thai Industries, which represent manufacturers not retailers.

"The new retail draft and any new regulations should be fair to all stakeholders. They should be in place to ensure maximum benefits to Thai consumers and the general public," Likit said.

He said the bill gives more power to suppliers than retailers. He said this would not encourage suppliers to cut their operating costs, and consumers would eventually suffer.

"If we [retailers] cannot cut a good deal from local suppliers, we can import cheaper products under the FTAs [free trade agreements]," he said.

Thanapon Tangkananan, who succeeded Likit as the TRA president, said the law should be practical and take into consideration the needs of consumers.

--The Nation

[marquess]

As I have always maintained, Thailand is a great place to live, providing you don't invest any money here. The rules of the games change every day and you do not have recourse to any form of civilised law, to redress greviences!

[melus]

Hey, let's go back to stale bread, bad meat and wilted vegetables, and being ripped off by the mom and pop stores. Great direction.

[Dradam]

"Siripol said if any giant enterprises disobeyed the order, their representatives would be subject to imprisonment of up to 10 years or a Bt50,000 fine, pursuant to the Commodity Act."

I love punishment in Thailand. 10 years in jail or 50,000 Baht.

Rich people laugh at the punishment. It is just expensive enough to be annoying but cheap enough to be paid without too much trouble.

Poor people just have to take the jail time.

Edited September 8, 2006 by Dradam

[cclub75]

As I have always maintained, Thailand is a great place to live, providing you don't invest any money here. The rules of the games change every day and you do not have recourse to any form of civilised law, to redress greviences!

Regarding this issue, make no mistake... It's only because of the elections.

Tesco, Carrefour are way too powerfull.

The minister is clear : "suspend expansion until"...

Of course, he did it the thay way.

This line must have created a big laugh among the multinationals :

"Siripol said if any giant enterprises disobeyed the order, their representatives would be subject to imprisonment of up to 10 years or a Bt50,000 fine, pursuant to the Commodity Act."

Siripol is a pupet, without real power (I mean against the "money").

As for the debate big retailers versus small local retailers : i believe this is a discussion of the past....

[Upcountry]

The only really sad thing about this, other than we probably won't see a new store in our town, is that it is clearly another populist program designed to attract votes from the under-informed populace.

I doubt the government is really serious about this in the long run, unless it will benefit our (mostly) fearless leader.

Some protection, if done right, for local merchants, if balanced by enforced rules about product quality and prices, might be a good thing, but the timing of this is definitely suspect.

[popshirt]

As I have always maintained, Thailand is a great place to live, providing you don't invest any money here. The rules of the games change every day and you do not have recourse to any form of civilised law, to redress greviences!

I couldn't agree more! I only wish I had known that two years ago! It is now my number one piece of advice to newbies (and any one else who will listen).

[paul-s]

I am not sure the Thai's are going about it in the right way, but there is a need to slow up these big multi nationals from ruling the world. I am in the UK and have to travel miles to shop for groceries, as all the small independents have now gone. Some were very good, cheap and did not out of date produce.

The delema is, I do love the big stores prices and choice. But I do hate traveling all the way to Thailand to the Far East as it called and then seeing Tesco (it sort of takes away the magic)

[jdinasia]

Thaiquila .... food markets? I've NEVER paid more than locals ...

in a couple of shops in Hua Hin when I was VERY new I paid a bit too much for cleaning supplies and towels a few times ... Then I learned the prices.

And for those that are complaining about going back to stale/wilted/overpriced .... well for you ..no ... not unless you move to a place where there isn't a big box store!

Granted .... I now live in Phuket ... just no issues here. 90% of my daily shopping is here in Kamala ... Then there are the monthly trips to Phuket town 23 kms away for the cases of drinks etc etc

Edited September 8, 2006 by jdinasia

[thaitanic]

I'll be gutted if the Patong Carrefour is put on hold again. They've only just started work on it again since the tsunami. I hate those slippery rides over the hill to Big C.

[Huckenfell]

I don't see slowing the expansion of the Big Box stores as a shame .... in the USA theyhave been fighting this battle against WalMart for years!

However WalMart would move into some areas killing the little specialty stores <hardware, plumbing, etc etc> and after those stores were gone and their sales didn't meet projections they woul close the big box store ... leaving the community with nothing!

Jindinasia................EXACTLY! they are doing the same here in oz, wrecking small towns, forcing small business out. Its a very serious problem.

[Yknot]

Who is fighting it? The small store owners. Who are quite rich and are overcharging people here. ... It will be good for the residents!

Sure the current shop owners don't want to compete with Walmart (Tesco, etc.), and they try to present it as a "little guy" fighting the "big corportation" battle. For the real little guy, better prices and selection are a good thing.

It always surprises me that some ordinary people will side with the small store owners. Even if the local store owners haven't been shafting the people for years, they just can't offer the same prices and service. But fome folks just can't help themselves, and actually feel good about fighting a major improvement.

[number6]

As I have always maintained, Thailand is a great place to live, providing you don't invest any money here. The rules of the games change every day and you do not have recourse to any form of civilised law, to redress greviences!

Well i had a good business in UK until UK government decided to introduce more and more

rules regulations red tape until id had enough - id agree dont invest more than you can afford to walk away from but i dont agree dont invest anything. I have a thai wife and child and invest for them. I mean thai stocks, condos for rent property a small shop etc. I dont see the thai government confescating it but they could just like UK governemt did in late 50's with compulsary

house purchase for roads etc My family where paid 5 pounds a house for ones theyd paid hundreds for on basis of redevelopment - sorry dont agree if your careful you are probably ok here - sure not as 99% safe as UK but probably 95% and donmt forget history hyper inflation in germany

1929 crash repossessions in 90's missold pension schemes Dear mr Browns raid on pensions maxwell and a million more - sorry risks here are in MHO not thatm uch greater but then i agree dont put all your baskets in 1 egg

Don t worry about big boys their going ot be fine and believe me they ainst going to stop expanding here and wil find a way

[hilly]

If anyone is going to get it wrong then Thailand will for sure. This knocks overseas investor confidence but more to the point who do you think these suoper stores are aimed at? Not us falangs for sure. It is the Thai people that want them cos they enjoy shopping in them. This will be a vote killer but at least the government avoided a major clash with the small store owners who were threatning a march on the house of parliament, so great. They secure the owners of the small shope to vote for them and lose 6 million votes from the people who were looking forward to shopping in them. Thai logic, a contradiction in terms.