The "unbearable" growing impact of modern retail trade outlets upon local grocers and suppliers has prompted the Thai Chamber of Commerce (TCC) to ask political parties to come up with a policy during the upcoming election of protecting traditional traders.

It is the first ever such move by the national commerce body. Normally, opposition to modern trade outlets - giant superstores and discount centres - comes almost exclusively from local grocers themselves.

"We have received complaints from our members nationwide on the great impact of modern trade in their districts," said Thawisant Lonanurak, a member of the TCC Board and chairman of Nakhon Ratchasima's Chamber of Commerce.

"The impact began over ten years ago but has been significant only in the past five years and has reached an unbearable level in the past two years," Yuttana Kanchanawongchai, another TCC Board member said.

According to Yuttana, the impact is first felt by local grocers, then small suppliers and then the giant suppliers like the Sahaphat Group, a main commodity producer and supplier in Thailand.

More than 60 per cent of grocery shops nationwide have been forced to close in the past five years, leaving the remainder to face a tough future. While suppliers are also forced to depend on the super-centres and hypermarkets, he said.

In the past seven months, the trade value of key suppliers has dropped by 30 per cent while the value of modern retail trade has risen 20 per cent, Yuttana said.

"If this trend continues, traditional traders will finally become extinct and foreign traders will dominate Thailand," he said.

"Not only in big cities, the super-centres like Tesco Lotus are now reaching districts and even tambons. Imagine how large the impact will be and how many people will be affected," he said.

Political will is needed in this situation, Thawisant stressed. "A Retail Trade Act is needed to provide proper measures for controlling the growth of modern trade," he said.

"We are not opposing modern trade or particular super-centres. This is not an issue of trade barriers. What we need is a national law to enable modern trade co-exist with traditional trade," he said.

Traditional traders are like a handicapped runner competing against an Olympic champion, Thawisant said. The act should at least provide a certain level of protection for traditional traders.

"We are challenging political parties to support this act as a main policy in the coming election," Thawisant said.

"If any party agrees to support the act, we are ready to cast our vote for that party. Think about how many members the TCC has," he added.

"Normally, parties will formulate policy on their own - the inside-out approach. This is an outside-in approach. We are telling them what kind of policy we need," he added.

As part of the support campaign for the act, each TCC member in an area where there is planning and construction of a modern trade project will separately express opposition in their own area, Thawisant revealed.

Last Thursday, a demonstration was held in Nakhon Ratchasima's Pak Choeng district against the Tesco Lotus construction there. Another protest will take place in Pak Thongchai district soon. Opposition continues in 11 other provinces, he said.

The TCC will also ask the National Economic and Social Advisory Council to support its demand for the act, he added.

Responding to the TCC's call, the Democrat Party's Kiat Siddheeamorn, a party chairman of the Audit Committee and trade team told The Nation the Democrats fully support a Retail Trade Act.

"Local trade should be protected. Most of all, public participation must be included in the [drafting of] law," he said.

Saree Ongsomwang, secretary-general of the Foundation for Consumers, said her organisation strongly supported the TCC's idea.

"Modern trade is unavoidable but traditional trade should be protected. It is the government's role to set rules to enable fair trade for all, including traders and consumers as well as farmers who supply agricultural products to the market," she said.

According to the TCC, Thailand's current retail trade value is approximately Bt 1.7 trillion with growth at 5.4 per cent per year, down from 6.9 per cent last year. However, the discount-store sector was growing at between 10-20 per cent per year.

Kasikorn Bank Research Centre says the proportion of modern trade to traditional trade in the Thai retail business has shifted from 40:60 to 50:50 in the past five years.

"A law is needed to balance both businesses. However, this situation is similar to that in the year 2000 when the Retail Trade Bill was being drafted. Political factors influence the outcome of fair rules on retail trading."

In 2000, groups of trade experts and representatives from various sectors, both government and private, including the TCC, drafted the Retail Trade Bill, containing measures to control the proper growth of modern trade outlets in Thailand in order to provide protection for traditional traders and local people. The key measures included the establishment of national and local committees to ease conflict, zoning restrictions and punishment for violators.

The draft was submitted to the Cabinet in November 2002, but the government wanted to avoid sending the wrong message to foreign investors that Thailand has a trade barrier policy.

As a result, investors would approach the local administrative organisations for approval without the participation of local residents, resulting in no opposition in many areas, according to TCC's Yuttana.

Consumer activist Saree said the government should seriously review the policy on modern retail trade as a whole, not only in the aspect of trade.

"We should find a proper role for modern trade in our society; how to make it fair to farmers, manufacturers, traders and consumers. Trade is linked to all sectors," she said.

Quality of service and products are another important issue for consumer protection, she said. Consumers had complained to her foundation about products from modern stores. The foundation planned to demand that modern trade businesses announce a clear social responsibility policy to the public, Saree said.

"It is true that in most complaints the consumer might get compensation, but our point is the business should not let it happen in the first place. Not every consumer is brave enough to complain in Thailand," she said.

Kamol Sukin,

Sumalee Phophayak

The Nation