Thursday, December 24, 2009

Retail law called 'too late'

A picture of Ananda Samakhom Throne Hall in Ba...Image via Wikipedia

Local retailers say the approval of the long-delayed law to govern the retail and wholesale business has arrived to late to save their businesses, as prime locations have already been snapped up by large cash-rich operators.

"It is too late. The prime locations both in Bangkok and upcountry have been already occupied by giant retailers," said Somchai Pornrattanacharoen, president of the Wholesale and Retail Association.

"The new law just helps delay the expansion of their new outlets. It does not order them to stop [further expansion]."

The cabinet yesterday agreed in principle with the latest draft of the retail and wholesale act submitted by Commerce Ministry - five years after small retailers first started lobbying for the law.

The Council of State will be asked to look into the details including the size of modern trade stores and the wording of the bill.

Scrutiny by the government's legal adviser would take about six months before the law is sent back for cabinet for approval and parliamentary debate, said Yanyong Phuangrach, the ministry's permanent secretary.

In the latest draft, a central committee chaired by the commerce minister would be empowered to approve the opening or expansion of modern trade stores. Provincial committees would still remain but their role would be only to offer comments in a capacity as a sub-committee.

Four types of businesses would require official permission: 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 (300 to 999 sq m), and small retailers (120 to 299 sq m) such as chain convenience stores with high annual turnover.

The rules exclude fresh markets and outlets operated by the co-operatives.

Mr Yanyong said the law should be enacted as soon as possible as giant retailers have been rapidly expanding throughout the country.

Large companies such as Big C, Carrefour, Tesco Lotus and 7-Eleven now have about 9,900 outlets altogether, up from 8,900 last year. The 7-Eleven chain alone accounts for nearly 5,500.

He said opening and closing hours for large outlets and their distance from the central areas of municipalities could be determined later through ministerial regulations.

He also said a special fund to help small retailers affected by the expansion of big chains was not necessary at the moment but other support measures could be considered.

Thanapon Tangkananan, president of the Thai Retailers Association, said members would seek permission to share comments with the Council of State.

"We desperately want clarity on the guidelines for the approval process of the responsible committee. We don't want the approval decided by way of using judgment which is tough in practice," he said.
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