Wednesday, November 11, 2009

New law to curb modern trade outlets

Checkouts at Tesco Lotus WattanaImage by paulancheta via Flickr

A new law will require operators of modern retail stores to gain official permission before they can build new outlets, says vice commerce minister Veerasak Jinarat.

The draft retail law will cover stores larger than 120 square metres. It will also establish committees, drawn from the public and
private sectors, to vet new developments.

After feedback from nine
public hearings nationwide, the government and retailers have agreed that four types of businesses should require official permission to be developed. They are very large retailers with outlets larger than 3,000 sq m; large retailers sized 1,000 to 2,999 sq m; medium-size retailers of 300 to 999 sq m; and small retailers sized 120 to 299 sq m.

Proposed retail developments in Bangkok will need permission from a 15-member committee chaired by the commerce minister.

Developments located upcountry will seek approval from a 13-member committee chaired by the provincial governor.

There are also limits on how close to municipal areas new retail developments can be, ranging from 1km for small retailers and 3km for medium-size to 5km for large and 10km for very large retailers.

The committees will also decide on the retailers' operating hours.

Recent figures show there are 9,921 modern retail stores nationwide, including 636 branches of
Tesco Lotus, 77 Big C, 43 Makro, 38 Carrefour and 5,100 7-Eleven.

Somchai Pornratanacharoen, president of Thailand's Wholesale and Retail Association said the government should be brave and push the legislation through.

"If the retail law is not implemented within two years it will be useless because the large retailers would dominate the whole market the next four to five years," Mr Somchai said.

A few large retailers now control about 60% of the 1.4 trillion baht
retail market.

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