Adapt or die, retailers told

[dirtydog]

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
Nakhon Ratchasima

[Gerbil]

Cool. Close to what I would have said.

"Fcuk off, or die" would have been closer though.

[dirtydog]

HYPERMARKETS
Setback for law to limit retailers


Surayud and other Cabinet ministers demand changes



The Cabinet yesterday rejected draft legislation for the country's first-ever Retail Business Act following strong opposition from Prime Minister Gen Surayud Chulanont and other key ministers.

Krirk-krai Jirapaet, the commerce minister, sought to win Cabinet support for the draft by explaining its merits. If approved, the law would have curbed the expansion of retail giants through zoning and other regulations, created a level playing field for retail competition, and establish an independent body to regulate the retail business.

But Surayud opposed the draft from the outset, as did Dr Kosit Panpiemras, the deputy prime minister and industry minister, Dr Chalongphob Sussangkarn, the finance minister, and Yongyuth Yuthavong, the science and technology minister, a Cabinet source said.

The Cabinet instructed Krirk-krai to revise the draft on two main issues. First, it must come up with a better structure for the retail and wholesale commission, formed to regulate the retail business. The selection process of the commissioners at both the national and provincial levels must be spelt out.

The Cabinet was afraid the draft might give too much power to the commissioners, dominated by officials from the Commerce Ministry.

Second, the Cabinet wanted the draft to spell out more clearly the retail and wholesale system, so that both small and big retailers or wholesalers could co-exist. For instance, large-scale retailers must be kept at a certain distance from local communities.

Finally, the Commerce Ministry must conduct a public hearing on its draft legislation to get feedback from the public before resubmitting it to the Cabinet for approval.

"The ministers' comments focussed on the potential excessive authority of the commissioners, who might become a tool of politicians," a source at the Cabinet meeting said.

The Cabinet's rejection of the draft came as a surprise to Krirk-krai. Last Saturday he told a

seminar in Nakhon Ratchasima that he hoped to get approval from the Cabinet before the Council of State vetted its legal language. Afterward, the National Legislative Assembly would debate and vote on the proposed legislation before passing it into law in July.

Krirk-krai was disappointed with the rejection because earlier he had not detected any signs that it would be shot down. He left for China yesterday at the head of a delegation to hold talks on how to improve bilateral trade and promote Thai rice exports.

Small local retailers have been calling for the Surayud government to introduce stringent regulations to curb the rapid expansion of retail giants, particularly Tesco-Lotus. The small retailers met Krirk-krai in Nakhon Ratchasima last Saturday with a message that Tesco-Lotus should halt its expansion immediately, pending the promulgation of the retail legislation. Tesco-Lotus is expanding its outlets rapidly in upcountry districts and its Tesco Express has also grabbed a foothold in local communities and threatened the survival of traditional stores.

Without a new retail law, the superstore giants are free to expand their outlets throughout Thailand without restrictions.

The Cabinet also wants the Commerce Ministry to come up with a clear-cut definition of the retail business and the authority of the independent committees to regulate it.

Another source from the Cabinet revealed yesterday that the government was divided over the issue; certain ministers opposed the draft law while others sympathised with it.

Some ministers believed the Cabinet should impose a moratorium on outlet expansion of the retail giants until the law is passed. But the Cabinet ignored the proposal, the source added.

"It seems the key ministers have already decided to oppose the draft legislation, even before listening to Krirk-krai's explanation. They did not pay attention to the details but only asked the Commerce Ministry to revise the draft," the source noted.

Although the act was drafted in 2002, the interim government ordered the ministry to amend the draft last year in order to bring it up to date to ensure fair competition in the retail business.

Siripol Yodmuangcharoen, director-general of the Internal Trade Department, said Krirk-krai ordered the ministry to immediately revise the law in accordance with the Cabinet's wishes.

The ministry will call a meeting with the drafting committee and representatives from local and giant retailers to rewrite it.

Skol Harnsuthivarin, secretary to the commerce minister, said the ministry would not surrender on the issue but would resubmit the draft to the Cabinet.

Nirut Vacharapichart, coordinator of the Opposition to Multinational Retail Business Union, said local retailers want the Cabinet to immediately stop the retail giants from expanding until the retail legislation was approved.

"Small retailers will perish before they see the retail business law," he said.

The union's president, Panthep Suleesatira, said small local retailers were very upset at the Cabinet's decision. He said the government favoured the multinational companies instead of trying to protect local retailers, who are being squeezed.

The union will call for a meeting to explore further measures to block the expansion of the retail giants.

Darmp Sukontasap, a senior vice president of Ek-Chai Distribution System, which operates Tesco-Lotus, said the company agrees with the need for Thailand to have a retail business law, and it should be implemented within a suitable period.

He said foreign investors now had less confidence in the interim government and it must find proper ways to bring in regulations that will boost foreign investor confidence.

Chadatip Chutrakul, managing director of Siam Piwat Co Ltd - the operator of Siam Centre and Siam Discovery, as well as a co-investor in Siam Paragon shopping complex - asked the government to carefully consider all the benefits and weaknesses before approving a new retail law.
She said the government does not have to rush the new law as her company and others was happy to wait for the best legislation that would not hurt retailers, international investors and tourists.

Petchanet Pratruangkrai,

Piyanart Srivalo


The Nation

[sabang]

As every other more advanced nation has gone, so will Thailand.
They can slow it down, but ultimately the small corner shops will give way to the big chains. The big chains have, above all, purchasing power. They also have marketing and Brand recognition.
The interesting thing is that if you compare a small village family owned shop to a Convenience store such as 711 or Family mart, they are no more expensive. I quite like to buy a few things from our village shop, but I must admit their bloody rabid dog that doesn't like falangs (not this one anyway) puts me off a bit.

[dirtydog]

DRAFT TRADE ACT
Retail law wins backing from Cabinet


Bill set for implementation 'within two months'; Interior Ministry to get power to curb retail giants' expansion


The Surayud Cabinet yesterday approved a draft retail business law, which will give power to the Interior Ministry to curb the expansion of the mega-retailers through its city planning and building codes.

The move is part of a set of urgent measures proposed by the Com-merce Ministry in draft legislation to halt the rapid expansion of giant retailers, which have grabbed a strong foothold in cities, districts and small communities - and caused the demise of thousands of "mom and pop" stores.

A local retailer, who asked not to be named, said the draft legislation was likely to be passed by the National Legislative Assembly within the next two months so that Thailand will have a Retail Business Act for the first time by the middle of this year.

Under the proposed draft, the Interior Ministry would assume responsibility of curbing the expansion of giant retailers by exercising its power under the City Planning Code and Building Code.

The Surayud government hopes the Retail Business Act will create a level playing field in the retail and wholesale sectors.

Last month, Cabinet rejected the legislation draft, saying some clauses were ambiguous and also gave enormous power to regulating committees.

Netpreeya Chumchaiyo, assistant to the Government House spokes-man, said yesterday some clauses in the draft had been changed to create more transparency. The new law would balance the regulatory power of national and local commissioners, who will regulate the retail business.

At present, Thailand has only a disparate set of individual regulations governing the retail sector, and the Commerce Ministry has spent years devising a single set of rules for the retail trade.

Foreign investors, particularly from Europe, have expressed fears about the Retail Business Act, and draft amendments to the Foreign Business Act, arguing that the laws would make Thailand less attractive to invest in.

The US took a similar stance last week when it cited Thailand's move to introduce the retail business law as one of its alleged reasons for downgrading Thailand's trade status to "priority watch list".

Once approved, the retail trade laws would restrict the building of vast, modern retail outlets, whether locally owned like smaller shops - or bigger players like Tesco Lotus.

Supermarkets or hypermarts would be subject to rules and regulations. Most other countries have similar retail laws to protect small retail shops. The law will also focus on zoning regulations, and assign specific areas where retail outlets can be located.

Small retailers have been putting up a fierce fight against the retail giants, particularly Tesco Lotus, which has expanded its presence to districts and sub-districts nation-wide.

The retail sector is worth about Bt1.2 trillion a year, out of an economy totalling about Bt7 trillion.

Thanapon Tangkananan, president of Thai Retailers Association, said yesterday that new retail law would "damage the sentiment and confidence" in the Thai economy. And implementing the law at a time of political uncertainty could affect the confidence of foreign investors.

This could also have a domino effect on employment, manufacturing and people's spending, he said.

Previously, the Thai Retailers Association claimed the retail sector would register flat growth this year if the new Act was passed and implemented. It said growth in the retail sector slowed to 4 per cent in the first quarter this year - and was forecast to grow by 2-3 per cent over the whole year.

"The Cabinet has stepped back to allow 'old traders' in many areas to continue to monopolise the market instead of creating more choices for the consumer," he said. Restrictions to control business expansion would also limit competition.
The association said wanted to see the revised draft before commenting on the regulatory power of local and national commissioners.


Business Desk
The Nation

[dirtydog]

Small retailers call for more government support

PHUKET CITY: The Phuket Chamber of Commerce (PCC) has called for the central government to do more to help small retailers cope with the on-going expansion of superstores and convenience store chains on the island – including having the stores pay more in local taxes.

PCC President Eam Thavornwongwongse on Friday led a small delegation of PCC representatives at a meeting with Phuket Governor Niran Kalayanamit at Phuket Provincial Hall.

The delegation presented to the Governor its recommendations following an April 19 meeting of small retailers from across the island.

The PCC is urging the Governor to raise the plight of small retailers with Prime Minister Surayud Chulanont during the premier’s May 13-14 trip to Krabi to meet with Governors of the six Andaman Coast provinces.

Chief among the PCC’s complaints are that large retailers and convenience store chains are not subject to a variety of local taxes because their businesses are registered in Bangkok, not Phuket.

Superstores generate a great deal of garbage and waste in local communities without having to pay local administrative bodies left responsible for its removal, they say.

The PCC requested that Gov Niran raise the following four requests during his meeting with the PM:

1. That all retailers, from large superstores down to small “mom-and-pop” shops, be required to pay all local taxes to the local administrative body in which they are located. This would to help pay for garbage collection and disposal, wastewater treatment and other necessary local government services;

2. To slow down the expansion of superstores and convenience store chains on the island until a new Retail Act is ratified;

3. To establish a low-interest loan fund to enable small retailers to re-invest in their businesses to make them more competitive;

4. To help small retailers identify and develop their competitive advantages so that they can compete better.

Gov Niran said he would try to raise the issue with the PM, along with other pressing problems facing the island.

The Phuket Revenue Office would be asked to report on local taxes paid by large retailers and convenience store chains, which would be asked for cooperation in rectifying local tax payment issues.

However, following a video conference held by Krabi Governor Siwa Sirisaowaluck today to prepare for PM Surayud’s visit, Gov Niran told reporters that because the PM’s time was so limited he would only be able to present Phuket top three priorities – and the small retailers’ concerns were not among them.

He listed the top three priorities that would be raised with the PM as follows: 1. Funding for a second trash incinerator at Saphan Hin; 2. Regional coordination for testing of the tsunami warning system with one province to serve as the coordination center; and better warning coverage on outlying islands; and 3. Funding to improve land, sea and air transport infrastructure.

However, small retailers will take relief from Cabinet today approving a revised version of landmark legislation regulating the retail and wholesale industry. It also assigned the Interior Ministry to use existing laws, including city planning codes and building control laws, to restrain business expansion of retail giants.

Phuket Gazette

[keda]

If a large retailer offers me better deals, a more pleasant shopping environment, with better parking and other facilities than a small retailer, can't see the government with a legitimate right to impede natural progress in support of the sprats.

May sound heartless but in the real world the small biz has to shape up or roll over.

[sabang]

Social Darwinism. Dog eat Dog.
Why can't the Thai grasp these simple concepts?

[dirtydog]

Vendors want Tesco blocked


A group of 50 small vendors and retailers yesterday demanded that their governor halt Tesco Lotus Superstore from building a branch in Prachin Buri province.

They met Oros Wongsit while he chaired a provincial basic-education meeting.


Oros promised to meet with company representatives.

He admitted city-planning laws could not stop the company because the new supercentre was earmarked for Sri Maha Pho district, outside the municipality.
Public works, city planning, and police officials will try to find a solution, he said.

The Nation

[Jet Gorgon]

Late 1990s, Nong Khai residents voted on whether to allow a KFC, way out towards the Friendship Bridge. Thought nothing of it until 7-11 came to my village. What? We were all accustomed to going to the morning market for meat and veg, and getting our other shopping done by 8pm, when our big grocery closed. Never had a prob with that. When Tesco came to the island, all the small vendors were terrified. But things sorted themselves out. People still shopped locally if they needed something immediately. Many still used the wet markets and local shops as Tesco's fresh food was shite in comparison. Why buy from Tesco when I can get seafood fresh from the fishermen and fruit and veg from the growers?

[RDN]

... as Tesco's fresh food was shite in comparison. Why buy from Tesco when I can get seafood fresh from the fishermen and fruit and veg from the growers?

You can include Big C in there as well

Their whole chickens are rancid and re-wrapped from the day before with the label changed. Their prawns made my g/f ill.

We now buy chickens from the Muslim "chicken lady" at the local street market and fish from the Rawai sea gypsies.

[Jet Gorgon]

We now buy chickens from the Muslim "chicken lady" at the local street market and fish from the Rawai sea gypsies.

Definitely the way to go. I never got sick from market food. Way fresher. And no waste from all that plastic packaging. Had my own market basket. But lots of baggies for fish and meat; I tried.

[Spin]

Adapt or die

Thats a bit harsh, I would have gone with:

"Adapt or get a job at Tesco's"

[Mid]

NLA passes Retail Business Act

Thailand's National Legislative Assembly accepted the Retail Business Act to deal with retail and wholesale businesses nationwide.

The NLA voted 97-6 to approve the government's legislation in principle and set up a 24-person extraordinary committee to scrutinise the bill which calls for the Commerce Ministry to form a committee to set policies and measures to promote as well as regulate retail and wholesale trade in fuel, jewellery and newspapers, among others, so that the businesses will be carried out in a fair, equal and competitive fashion.

Commerce Minister Kirkkrai Jirapaet said the bill will by no means obstruct any large-scale enterprises which may deal in retail and wholesale businesses, though an estimated 100,000 local retail stores nationwide had already gone out of business in the face of the giant stores over the past four years.

Neither was the legislation designed to thwart the running of local retail and wholesale businesses in fair competition with the giant stores -- against which local traders and the public in some 40 provinces had already strongly protested, according to the commerce minister.

NLA member Ammar Siamwalla described the legislation as ill-defined and suggested retail and wholesale businesses nationwide should be supervised by local administrative bodies instead of the Commerce Ministry. (TNA)

bangkokpost.com

[Texpat]

A Tesco was recently opened in our Ampur. It's not as big as others I've been to and the selection of meat and dairy are awful.

All the mom & pops bitched cause they'd have competition, but it opened anyway. Tesco is cheaper, cleaner and more convienient.

[Happyman]

Vendors want Tesco blocked


A group of 50 small vendors and retailers yesterday demanded that their governor halt Tesco Lotus Superstore from building a branch in Prachin Buri province.

They met Oros Wongsit while he chaired a provincial basic-education meeting.


Oros promised to meet with company representatives.

He admitted city-planning laws could not stop the company because the new supercentre was earmarked for Sri Maha Pho district, outside the municipality.
Public works, city planning, and police officials will try to find a solution, he said.

The Nation

I like Mom and pop stores and the local fresh markets but what the F*ck have the Police have to do with the problem ????

[sabang]

My wife tends to go to the like of Tesco's for canned stuff, shampoo and whatever, but prefers shopping at the markets for fresh produce.

Markets are an Asian way of life- you still have them in hyper modern Hong Kong, and personally I hope it stays that way. Shopping in the West is really boring, with limited exceptions such as where there are decent markets.

[Whiteshiva]

My wife tends to go to the like of Tesco's for canned stuff, shampoo and whatever, but prefers shopping at the markets for fresh produce.

Same here, we have a wet market just accross the main road, and a Tesco a few clicks down the road. We usually shop at the wet market on the way back from Tesco in order to stock up on vegetables, fruit and meat. Wouldn't like to be dependent on just one of them, though.

[Norton]

The very thought of shopping at Tesco, BigC or Makro is so repugnant I would rather starve than endure the experience. It all starts with the parking lot obstacle course which involves maneuvering around brain dead drivers waiting 15 minutes for a parking space close to the entrance to avoid walking 1 minute.

As I head for the entrance, I am barraged with a cacophony emanating from countless competing vendors selling CDs, musical instruments and obnoxious talking toys. Observing there are only one or two people in the ATM queues, with hands clasped to ears, I line up to get some cash.

Apparently the woman in front of me has yet to master the subtleties of ATM operation. After much poking, canceling and restarting, much to my relief, she succeeds in completing the transaction and out pops 200 baht. Having now become the resident expert, she turns and gives the thumbs up to five of her friends lurking next to the queue. Just as I'm prepared to take my place at the ATM she produces 5 more ATM cards from her handbag along with a list of pin numbers. As my temperature rises in the afternoon heat I try to remain calm as she proceeds to repeat 100 and 200 hundred baht ATM transactions. Ah, she is finally done and I get my cash and head for the entrance.

First order of business is to carefully select a shopping cart. Don't want to get one of those wobbly wheeled ones. There it is, a brand spanking new one which unfortunately is wedge so tightly with another it would take two full grown male elephants to pull them apart. I settle on the wobbly, you have to walk sideways to push it cart. Mi pen rai only milk, cheese, beer and bread to buy anyway.

Keeping my objective firmly in mind I scan the distant horizon in search of the dairy products section. Is that it there? Could be but hard to tell as it is 500 meters away. Spotting my age and inability to see, the woman on my left is intent on selling me a new pair of glasses and the guy on my right insists his binoculars are must haves. Although not 100% sure I have seen the dairy section, I opt to chance it rather than continue to tell my new friends I have no interest in their optical devices.

As I make my way toward the dairy section, I note the aisle with the most direct path is blocked by a guy with a very large fork lift downloading a pallet of skin whitening cream. Plan B, a quick left and right to go down the next aisle. This one too is blocked but not so as I can't get through. Only two of the largest shopping carts parked side by side. One containing a small bottle of fish sauce and the other a bottle of skin whitening cream. As I approach the carts I overhear their owners debating at length which bottle of cooking oil is best for deep frying dung beetles. To get one of them to move their cart forward slightly, I give an "excuse me" in my best Lao. They look at me as if I must have farted or something. I gesture to the shopping cart and they both smile and nod their heads. Taking this to mean I had permission, I moved the cart myself.

Moving forward my luck changes for the better as I saw huge stacks of beer a few steps ahead. Upon selecting the beer, I made the right turn to reach the dairy section. Feeling like Edmund Hillary as he approached the summit of Everest, my spirits were buoyed knowing I was but a few meters from my goal! And then it happened! I was cut off by six shopping carts manned by, you guessed it, the ATM moron and her friends. They headed straight for the dairy section right in front of the milk and cheese.

Thinking I could outflank them with a Rommel maneuver, I accelerated my pace but was foiled by the performance of my wobbly, steer sideways cart as it careened into a cop purchasing surgical gloves and KY jelly. After much apology and indicating to him I really was not as handsome as he said, he allowed me to move on.

The delay was just enough to give the ATM lady and her now devoted apostles time to establish a complete blockade to the milk and cheese. I could see drastic measures would be needed to dislodge them. Not sure why, but being stuck in this maze, my thoughts turned to axes and redrum. Correct that, meant to say murder. Listening to the ATM lady tell her followers only farangs ate cheese but didn't know what it was used for, I saw my chance.

Stepping in front of her and grabbing a packet of cheese and milk I told her in my most scholarly voice "we eat this everyday to stay slim and keep our skin white". As I turned to leave, they were pooling their money to purchase all the cheese they could afford. Depositing the milk and cheese in the cart along with a loaf of bread nearby, I headed straight for the checkout counter.

I was pleased to see there were 30 checkout stands. What a relief! Wonder why only two have their number lights turned on? I quickly discovered the reason and 30 minutes later I was in front of the checkout girl. Placing my meager purchase on the counter the young lady said "do you know what time it is?" Thinking this was some kind of test I smartly responded ""2PM'. Her reply, "Can you come back after 5". Me, "No". Her, "You can't buy beer before 5". Me, "Why not". Her, "It's the law". Me "Can you make an exception". Her, "Yes". Now I'm getting somewhere! Me, "OK make one". Her, "You have to buy at least ??? liters". Can't remember how much as my mind was mush by then but far more than I wanted. Me, "Forget the beer just let me get out of this hell".

Paid my money and exited to the cacophony but with less irritation as I knew the ordeal was over. Only one problem remained, where is that f**king plastic card!

On the way home I stopped at my little mom and pop shop bought my beer without having a 17 year old Tesco Trainee telling me I couldn't and vowed never again to return to another mega store. The small shops offer better service, quiet hassle free environment, personalized attention and often times better prices if one shops around a little. They may not have all the stuff the Tescos of the world have but I can live without them. If it wasn't for my cheese addiction I would never have gone the first time. Hmm... now that the word is out about the skin whitening and sliming attributes of cheese, it won't be long until cheese is a mainstay in every village minimart!

[Whiteshiva]

I disagree on the conclusion, but I still nominate this as the post of the year! Greenies on the way!

[Propagator]

Very good Norton - still same in the UK with slight variations.

[Norton]

I disagree on the conclusion, but I still nominate this as the post of the year! Greenies on the way!

Just a dream, just a dream and the need for cheese.

[Norton]

Very good Norton - still same in the UK with slight variations.

Glad to hear it. Was beginning to think it was another "only in Thailand" phenomena. BTW, It's the same in the US at Walmart.

[Norton]

nominate this as the post of the year! Greenies on the way!

Thanks for the greenie but doubt it is the post of the year as few will read it tucked away in this somewhat obscure post.

[Zavier38]

The problem as I see it is that improved distribution networks and IT mean that economies of scale make it impossible for local shops to compete against big supermarket chains. Unless people adapt and identify niche markets that are not cost effective for the big guys then they'll go to the wall.

End result is more dis-enfranchised Mcworkers on minimum wages with a tiny, but increasingly rich and powerful elite. One area where Thailand is a world leader......

btw...Is it just me ....but I almost never come across Thais willing to try new ideas. Will they adapt to new ways of working or just pull up the drawbridges and blame the foreigners?