Thu, Oct 05, 2006 - Page 12 News List

Hypermarkets to freeze Thai outlet growth for October

AFP , BANGKOK

Nine large retail chains, mostly foreign-owned groups, have agreed to freeze their outlet expansion this month in a row with the Thai government and small shops, officials said yesterday.

But British supermarket giant Tesco said it will go ahead with its expansion, without specifying which outlets it may open for business.

"You cannot stop the world moving for 30 days, and it is the same for our business," said Darmp Sukontasap, director of corporate and legal affairs of Tesco's Thai unit. "Everything will go ahead as planned."

Big foreign stores have been locked in a row for weeks, and since before Thailand's Sept. 19 coup, with the government and small retailers, who complain the giant supermarket chains are driving them out of business.

Commerce ministry figures show that some 400 superstores control 60 percent of Thailand's US$26 billion retail sector, up from 40 percent in 2001.

On Tuesday the ministry issued guidelines which ban big retailers from "unfair practices" including "unfairly low prices" and warned operators that fail to comply face large fines and even jail terms.

Yesterday's agreement of an expansion freeze until Oct. 28 came after ministry officials met representatives of nine retail chains, including France's Carrefour and the Seven Eleven chain.

But Tesco insisted it will not freeze its expansion as requested.

"We can't follow the instruction to halt expansion as we have already committed ourselves to the trade partners and staff we recruited," Darmp said.

The retail giant is scheduled to open four more hypermarkets before the end of the year, and about 100 Tesco Express outlets. Thailand is Tesco's largest overseas market, with nearly 300 shops and plans to open 200 more.

Carrefour agreed to delay the opening of an outlet in Phuket by two weeks, until the temporary ban ends on Oct. 28.

"We don't want to see the row intensify," said an executive of Carrefour's Thai unit, speaking on condition of anonymity. "But we do hope there will be no more delays from the 30 days we have already agreed with the ministry."

The ministry, now under control of the military which ousted former prime minister Thaksin Shinawatra's government in a bloodless coup, shrugged off the risk of international concerns about free trade and investment policies.

This story has been viewed 1872 times.
TOP top