Approval gets mixed reaction
The Nation (17 October 2007)
Small retailers hailed the Cabinet's approval yesterday of Thailand's first-ever Retail Business Act, hoping they will be entitled to a fairer environment in the retail industry, which has been dominated by giant players. The draft act won Cabinet endorsement yesterday, and Commerce Minister Krirk-krai Jirapaet said the draft would be submitted to the National Legislative Assembly (NLA) for reading next Monday, as this government wanted to enact the law before the end of its term. The Cabinet yesterday also approved a Bt59-billion investment budget for the Red Line subway route, which will run 26 kilometres from Rangsit to Bang Sue. Internal Trade Department director-general Yangyong Phuangrach said the Retail Business Act was meant to create a fair environment for both large and small retailers. The highlight of the law is that a large retailer will need to request a licence from the Commerce Ministry. Large retailers are defined by floor space and sales. They must cover at least 1,000 square metres, and minimum sales revenue must be Bt1 billion. This includes retailers whose consolidated sales - from different branches - exceed Bt1 billion. The retail industry will be governed by a committee chaired by the commerce minister. To accelerate the Act's implementation, the ministry will call for a meeting on the Retail Business Act this Friday with five NLA representatives, to determine further points for NLA discussion. Panthep Suleesatira, president the Federation of Thais Opposing Foreign Retailers, said small retailers welcomed the Cabinet's decision. "Thai small retailers are looking forward to the Act manipulating the retail industry, because an aggressive expansion of giant retailers hurts us. The NLA should approve the Act soon, so that it can be implemented before giant retailers hurt more small retailers," he said. Tesco Lotus, the largest retailer, yesterday said it was ready to comply with the new Act even though tightened regulations would affect both retail operators and consumers. "As a business operator, we have every intention to comply fully with all laws and regulations," said Darmp Sukontasap, senior vice president of Ek-Chai Distribution, operator of Tesco Lotus. "However, the government should issue laws and regulations based on verifiable information and reliable research or studies, taking into account the long-term interest of the country." He said the company did not mind if the government considered it appropriate to have a law governing retail and wholesale businesses. The law should foster fair practices for everyone, and the roles and responsibilities of all concerned should be clearly defined for suppliers, wholesalers, modern retailers and mom-and-pop shops. The law should be transparent and apply equally to everyone. Darmp pointed out that consumers would be affected most by the new law, which would restrict their right to choose and limit the alternatives available to them. The government and the NLA should ensure that the law will serve the interests of consumers and not those of large suppliers and their wholesale network, he said.
Darmp said since the retail and wholesale sectors accounted for more than 18 per cent of Thailand's gross domestic product and were directly linked to inflation and the cost of living, the government and the NLA should consider what long-term effects the law would have on the Kingdom's overall economy.
"We hope all of these considerations will be discussed in the NLA when its members deliberate the draft law," he said.
He added that even at this stage, he still could not see how the law as drafted would benefit both mom-and-pop shops and consumers, even though claims have been made all along that both groups would benefit.
The Nation (17 October 2007)
Small retailers hailed the Cabinet's approval yesterday of Thailand's first-ever Retail Business Act, hoping they will be entitled to a fairer environment in the retail industry, which has been dominated by giant players. The draft act won Cabinet endorsement yesterday, and Commerce Minister Krirk-krai Jirapaet said the draft would be submitted to the National Legislative Assembly (NLA) for reading next Monday, as this government wanted to enact the law before the end of its term. The Cabinet yesterday also approved a Bt59-billion investment budget for the Red Line subway route, which will run 26 kilometres from Rangsit to Bang Sue. Internal Trade Department director-general Yangyong Phuangrach said the Retail Business Act was meant to create a fair environment for both large and small retailers. The highlight of the law is that a large retailer will need to request a licence from the Commerce Ministry. Large retailers are defined by floor space and sales. They must cover at least 1,000 square metres, and minimum sales revenue must be Bt1 billion. This includes retailers whose consolidated sales - from different branches - exceed Bt1 billion. The retail industry will be governed by a committee chaired by the commerce minister. To accelerate the Act's implementation, the ministry will call for a meeting on the Retail Business Act this Friday with five NLA representatives, to determine further points for NLA discussion. Panthep Suleesatira, president the Federation of Thais Opposing Foreign Retailers, said small retailers welcomed the Cabinet's decision. "Thai small retailers are looking forward to the Act manipulating the retail industry, because an aggressive expansion of giant retailers hurts us. The NLA should approve the Act soon, so that it can be implemented before giant retailers hurt more small retailers," he said. Tesco Lotus, the largest retailer, yesterday said it was ready to comply with the new Act even though tightened regulations would affect both retail operators and consumers. "As a business operator, we have every intention to comply fully with all laws and regulations," said Darmp Sukontasap, senior vice president of Ek-Chai Distribution, operator of Tesco Lotus. "However, the government should issue laws and regulations based on verifiable information and reliable research or studies, taking into account the long-term interest of the country." He said the company did not mind if the government considered it appropriate to have a law governing retail and wholesale businesses. The law should foster fair practices for everyone, and the roles and responsibilities of all concerned should be clearly defined for suppliers, wholesalers, modern retailers and mom-and-pop shops. The law should be transparent and apply equally to everyone. Darmp pointed out that consumers would be affected most by the new law, which would restrict their right to choose and limit the alternatives available to them. The government and the NLA should ensure that the law will serve the interests of consumers and not those of large suppliers and their wholesale network, he said.
Darmp said since the retail and wholesale sectors accounted for more than 18 per cent of Thailand's gross domestic product and were directly linked to inflation and the cost of living, the government and the NLA should consider what long-term effects the law would have on the Kingdom's overall economy.
"We hope all of these considerations will be discussed in the NLA when its members deliberate the draft law," he said.
He added that even at this stage, he still could not see how the law as drafted would benefit both mom-and-pop shops and consumers, even though claims have been made all along that both groups would benefit.
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