Quote:COMMERCE SEMINAR
Adapt or die, retailers told

Minister warns small traders new law will not save them unless they improve customer service

Commerce Minister Krirk-krai Jirapaet yesterday urged small indigenous retailers to modernise so they could better cope with intense competition in a vast retail sector dominated by multinational companies.

Speaking at a seminar organised by Nation Multimedia Group in Nakhon Ratchasima, the minister said local operators would not be able to survive the competition unless they became modern retail operators who constantly improved customer service.

To ease competitive pressures on small retail operators nationwide, the government is finalising a new retail bill for enactment by the National Legislative Assembly (NLA).

The proposed law will restrict further expansion of large retail outlets in city areas by imposing a zoning system. It will also require the establishment of a multi-agency committee to regulate the retail industry.

Krirk-krai said some wording in the draft legislation was being amended. The bill is expected to be submitted to the Cabinet for preliminary approval next week.

Afterwards it will be reviewed by the Council of State and forwarded to the NLA. The bill is expected to become law around June.

The minister said small retail operators, who have been hit hard by rapid expansion of giant retail multinational companies, should not expect the proposed law to solve all problems.

In addition, he said, the government has no legal authority to stop retailers opening new outlets if their projects do not violate existing law.

Meanwhile, Kirkrai said the Northeast accounted for one-third of the country's population but had the lowest per-capita income due to a wide income-distribution gap.

Since half the northeastern population are farmers, the government has adopted market-intervention measures to shore up prices of various crops, especially rice and tapioca, to improve their economic status.

The Nation March 25, 2007

The most typical feature for small retail shop is that they sell on credit. This has nothing to do with modernisation. In one of my neighbour villages there are eight shops "competing" with each other. Their customers are divided along family lines.

The one shop that build new to look like a 7/11 also looks like the one least frequented though it is best located too.

It's not only a question of modernising the shops, the customers need to be "modernised" too and taught on which basis to choose where to shop and get best value, i. e. get best service and save money.

More clips and viewpoints to this ongoing discussion at http://www.korat-info.com/forum/viewtopic.php?t=200
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Quote:Experts want clearer retail sector rules

Centralised body at heart of debate

Experts yesterday urged authorities to state more clearly in the new retail law the framework for pricing systems, opening and closing periods, the exact distance of locations from big cities, the size of businesses, and how to strengthen local traditional or family-owned shops. ''The revised draft should take into account fairness as it's a priority between large and small retailers. The law should be applicable also to large locally owned retailers, not only foreign ones,'' Dr Narong Petprasert, an economist at Chulalongkorn University, said at the public hearing held on the revised draft Retail and Wholesale Business Act.

The cabinet late last month turned down the original draft of the Retail and Wholesale Business Act proposed by the Commerce Ministry, saying it was still vague on some legal issues, particularly zoning regulations for retail business expansion.

The draft drew criticism from Deputy Prime Minister Kosit Panpiemras and Finance Minister Chalongphob Sussangkarn who feared it might further hurt investment, as well as employment.

On top of that, the ministers expressed concern about the all-encompassing authority of the new central body _ the Retail and Wholesale Supervision Committee _ that would take over regulation of retail businesses nationwide from local administrations.

The ministers as well as other observers have said the committee might be subject to political interference in the future.

At the hearing yesterday, Viroj Na Bangchang, president of the Consumer Force Association, also suggested the laws state clearly that the 12 members of the new committee should come from both central and provincial levels and be free of any vested interests. A mechanism to ensure a counterbalance between the provincial and central committees should also be in place, he said.''Requests by retailers and wholesalers to set up or expand new branches should also go through the central committee, not only through the provincial committees,'' said Mr Viroj. ''It may create unfair lobbying (by private operators) if the local or provincial committees are given a full authority to make their own decisions.''

However, Darmp Sukontasap, senior vice-president of Ek-Chai Distribution System, the operator of Tesco Lotus superstores, thought otherwise.

He said the local committees should be free to make their own decisions, saying the local committees were expected to have more experience and would know better what is good for their communities.

Mr Darmp also said the revised draft should state how to strengthen local traditional or family-owned shops.

The rapid expansion of modern trade retailers, and in particular large foreign retailers, has forced the Commerce Ministry to issue a draft law for the retail sector in response to protests from small shop owners.

Siripol Yodmuangcharoen, the director-general of the Internal Trade Department of the ministry, said that another public hearing would be held on April 23 before the revised draft of the law is resubmitted to the cabinet.

Bangkok Post April 13, 2007
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Quote:Thailand approves 'stopgap' limits on retail chain expansion

BANGKOK: Tesco, Carrefour and other international retailers operating in Thailand will face restrictions on further expansion as a result of the cabinet's approval Tuesday of temporary retail limits.

The cabinet of Thailand, which has Southeast Asia's second-biggest economy, behind Indonesia, agreed to adopt a "stopgap" Commerce Ministry proposal to limit retail chain expansion pending final approval of a law that is being redrafted.

The government will "use existing laws such as city planning laws and building construction controls to limit the construction of new retail stores by those retailers," Yongyuth Mayalarp, a government spokesman, told reporters after the cabinet met in Bangkok. "The bill has not yet become law."

Small retailers in Thailand, a nation of 65 million people, have been protesting the expansion of Tesco, Carrefour and two Thai chains, Big C Supercenter and Siam Makro, into regional provinces after growth slowed in Bangkok and neighboring areas.

"The commerce minister has received complaints from several provinces about the impact of branch expansion by large retailers on local family-owned shops," Yongyuth said.

The Retail and Wholesale Business Act is being softened from the original draft proposed last year. The law is meant to ease the pressure placed on local retailers by the expansion of big chains into provincial areas, Siripol Yodmuangcharoen, director general of the Internal Trade Department, said in March.

"The government has the duty to look after all small and large businesses," Siripol said then. "The law is needed to ensure their coexistence even though there will be some objection."

The rapid expansion of chain stores that combine supermarket and department store merchandise has "damaged some cultural values" in Thailand, Pridiyathorn Devakula, then the finance minister, said in December. The law will lead to the coexistence of large and small retailers, he said.

The earlier draft was criticized as "too broad" by the cabinet, which sent it back for Commerce Ministry revisions on March 27, Yongyuth said at the time. The cabinet demanded specific powers for the proposed National Wholesale and Retail Business Supervision Board, limiting its scope to deciding where stores can open.

International Herald Tribune May 8, 2007

Is it a "cultural value" that only CP 7/11 should be allowed to expand?
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It's a two headed snake. One one hand expansion will hurt local businesses that will never be able to compete because of volume buying and on the other it's good for the consumer, especially lower income ones, who can make their available cash go a bit farther and possibly improve their lifestyle.

Businesses can always survive by adapting what they are doing and giving products and service that big box stores can't. The government should be setting up programs in areas that are situated around the new proposed stores teaching the merchants how to capitalize on the increased traffic flow and how to tap into the new market that the Box stores will bring.

Here in our little town in Canada my friends auto parts business has increased since Canadian Tire ( big auto parts store the size of BigC) moved in down the road. He offers personalized service, very high quality parts and priced just a bit higher than Canadian Tire. It's worked in his favor.