New conditions set for giant retailers
The Commerce Ministry's Internal Trade Department has issued a new set of conditions aimed at preventing the aggressive expansion of superstores into small local communities, after unsuccessfully calling on the retailing giants to suspend their expansion plans for 30 days.
The big retailers have not yet said whether they would comply with the conditions. The department decided yesterday to end its call for suspension of expansion plans, which in any case expires tomorrow. Instead, it is asking the giant modern retailers voluntarily to help society by observing the new conditions, which were issued following a three-hour meeting between the department, the giant retailers and representatives of retail- and wholesale-enterprise associations. The main requirement is for all modern wholesalers and retail giants stop downsizing their business outlets to less than 10,000 square metres to compete with small retailers. If they want to establish new small outlets, they should change the names of the outlets. Any big retailer that wants to open a new branch will be asked to follow five conditions: First, its plans should be approved by a central committee after consideration is given to the impact on the local community and its environment. Second, the company should conduct a public survey in a target area before opening its business. Third, it should refrain from "dumping" goods or selling at unusually low prices that would hurt small retailers. Fourth, the company should report its expansion plans to the Business Development Department before embarking upon them. Fifth, the retail giants should establish plans to help small retailers and the community in their target areas. Department director-general Siripol Yodmuangcharoen said the measures would help small retailers prepare themselves before retail giants opened for business in their area. They are designed as an interim measure pending the Cabinet's approval of a new Retail Business Act to control expansion by modern retailers. However, the retail giants, including Lotus Tesco, Big C Supercentre, Carrefour, and Makro, have made no comment on the new conditions. Their representatives said top executives would decide whether the conditions would be followed. The department submitted a draft of the new Retail Business Act to Commerce Minister Krirkkrai Jirapaet for his consideration last week. Krirkkrai suggested some parts of the draft be amended to address flaws. Petchanet Pratruangkrai The Nation
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