Thursday, November 19, 2009

Retail act faces more revisions

Vejjajiva - World Economic Forum Annual Meetin...Image by World Economic Forum via Flickr

The cabinet yesterday called for yet another review of the long-delayed draft retail and wholesale act proposed by the Commerce Ministry, saying it needed to be merged with another draft prepared by the Thailand Trade Representative Office (TTR).

Prime Minister Abhisit Vejjajiva told the Commerce Ministry and the TTR to jointly consider the two drafts and merge them into one proposal.

Kiat Sittheeamorn, the TTR chief, is expected to chair a working panel to speed up the revisions of the act, which has been under consideration for more than five years.

According to the Commerce Ministry draft finalised after nine public hearings, operators of modern retail stores would be required to gain official permission before they could build new outlets.

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

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 from 1,000 to 2,999 sq m, medium-size retailers of 300 to 999 sq m, and small retailers sized from 120 to 299 sq m.

Proposed retail developments in Bangkok would need permission from a 15-member committee chaired by the commerce minister. Developments upcountry would require approval from a 13-member committee chaired by the provincial governor.

There are also limits on how close to municipal centres new retail developments can be, ranging from one kilometre for small retailers and three km for medium-size retailers to five km for large and 10 km for very large ones.

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

Thanapon Tangkananan, president of the Thai Retailers Association, said the Commerce Ministry draft was still not clear on the details of how to help small-scale retailers, who had lobbied for the law in the first place.

He has not seen the TTR draft.

Somchai Pornratanacharoen, president of the Thailand Wholesale and Retail Association, said the government should push the legislation through as the Commerce Ministry draft had passed through nine public hearings.

"If the retail law is not implemented within one or two years, it will be too late, as over the next four to five years large retailers will dominate the whole market," he said.

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

Mr Somchai also questioned whether the legislation could even be passed by the current fragile coalition government.
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