Hypermarket operators, backed by state-of-the-art global supply chains, invariably beat small retailers in pricing and quality of service and are very popular among consumers. But small retailers are demanding that the government help protect their businesses against what they describe as foreign domination in the retail trade. The value of the sector is expected to hit Bt1.7 trillion this year.

In the latest move, retail traders, backed by the Thai Chamber of Commerce, have demanded that political parties clarify their stances on what they plan to do if they become part of the government after the general election scheduled for October 15. Small traders want the future government to rein in multinational discounters to enable them to maintain, if not expand, their dwindling share of the market before giant discount store chains gobble it all up. Unless the new government can put in place certain regulatory controls to check the spread of hypermarket stores, many of the remaining small retailers, will be wiped out. Sensibly, small traders have shed the nationalistic slant that had dominated their campaign and are now emphasising the importance of a kind of coexistence between big discounters and small neighbourhood shops. Their pleas should be seriously considered by all key political parties contesting the upcoming election.

When the Thaksin government first came to power in 2001, it promised regulatory measures aimed at giving small retailers a fighting chance against the hypermarket onslaught. The government spent more than a year drafting a retail business bill that included zoning restrictions, but then abandoned it in late 2002. Any moves by future governments must take a balanced approach that will enable small traders to compete more efficiently, while avoiding creating an impression of discrimination against foreign businesses.

It must be reiterated that competition from hypermarkets cannot be seen as purely an economic matter. It is more of a combination of economic and social issues, which affect everyone in any given community. If this debate were just a question of economics, then the arguments for free trade, the promotion of foreign-investment, consumer interest and supply-chain modernisation would win the day.

But the retail trade, to many, is also a social issue. It is a well-established fact that many people from the lower rungs of society operate small retail businesses up the income ladder. All it takes is a little entrepreneurial streak. People who start small retail businesses may be landless farmers, factory workers or low wage earners who want to supplement their income. Helping these people to make a living is consistent with the country's efforts at economic and social development in general and its anti-poverty schemes in particular.

The best way to control the hypermarkets is zoning. If these big discounters are forced out of city centres, then both hypermarkets and small retailers will have maintained their respective comparative advantages. Consumers can then be expected to rationalise their behaviour. For example, people doing weekly or big-item shopping will go to out-of-town big discounters while continuing to shop for small items and daily groceries from street-corner shops.

What's more, discounters located outside city centres also are less likely to cause traffic congestion, which also creates air pollution that is bad for everyone. It can be argued that whatever regulatory measures Thailand eventually chooses to impose on hypermarkets should be based on rational decisions based on their social and environmental impact - not protectionism or xenophobia. And Thailand will not be alone in imposing regulatory restrictions on big discounters. Given the country's sizeable retail market, it is also unlikely that these international discount store chains will cut bait and run from Thailand simply because of some sensible restrictions.