Community impact key focus of retail law

Superstores say they boost farm income

PHUSADEE ARUNMAS

The Commerce Ministry has pledged to balance interests of all parties and consider the impact on Thai culture and farmers when drafting the Retail Act.

A study group drafting the law will try its best to create an optimum balance of interests between family-run shops, modern trade, suppliers, consumers, farmers and Thai culture, said Karun Kittisataporn, the ministry's permanent secretary and chief of the study group.

Mr Karun said the entire trading system would be hard hit if large-scale retail outlets were allowed to expand freely, given their high bargaining power, which could easily influence crop prices.

On the proposal to set up a national committee to oversee branch expansion by modern hypermarket and convenience stores, Mr Karun said the draft in principle would allow the new committee to work independently and be free from any political intervention.

Future approval by the committee for branch expansion would be based mainly on requirements of individual communities, population density, and the impact on family shops.

He said the committee might avoid disputes by prohibiting giant stores at cultural sites, such as the 100-year-old traditional market in Ang Thong province's Wiset Chai Chan.

According to Mr Karun, the draft Retail Act is due to go before the cabinet for approval next month.

The draft law was completed in 2002, but scrapped by then-commerce minister Watana Muangsook, who decided to use existing laws, including the town-planning law, to regulate the business.

According to a ministry source, the existing town planning law will regulate the retail business until a new law is passed. The Commerce Ministry has already asked the Interior Ministry to circulate letters to governors in all provinces to strictly adhere to the town planning law, and closely oversee the branch expansion of large retail outlets.

Thanapon Tangkananan, president of the Thai Retailers Association, said that modern-trade retailers fully supported local farming by purchasing and distributing farm products at all stores. They bypass middlemen and buy produce directly from farmers.

''This way, farmers would receive higher earnings than they would get if they sell through the old channels, relying on middlemen, while consumers get more reasonable prices,'' Mr Thanapon said.

Mr Thanapon did not agree with the assumption that modern retail trade has destroyed the traditional trade. He said it was necessary for retailers of any type and size to stay abreast of current trends.

According to Mr Thanapon, many retailers were quite worried about the new retail law. especially the power of the proposed regulatory committee.

Darmp Sukontasap, senior vice-president of Ek-Chai Distribution System, the operator of Tesco Lotus superstores, said it was modern trade retailers that had given farmers a chance to sell their produces directly to gain more income.

He said Lotus had outlets in 40 provinces all over the country to buy farm products. It even educates farmers on how to improve product quality and avoid using chemicals, he said.

He said the store had comprehensively helped farmers on product improvement and invested in centres in Ratchaburi to purchase farm products closer to farms.

Bangkok Post
Wednesday January 31, 2007