Meanwhile, the Thai Retailers Association, which represents foreign retailers such as Tesco Lotus, sent a letter to the Commerce Minister last Friday requesting a meeting with him.

Niroot Vatcharapichart, head of the Federation of Thais Opposing Foreign Retailers, said it was set up two months ago by small retailers who could not compete with Tesco Lotus, which has increased its number of both large and small outlets throughout Thailand.

"We will rally tomorrow from 7am before moving to government house to hand our letter to the Prime Minister. Our aim is to ask Tesco Lotus to stop expanding its outlets in the districts," said Niroot.

Niroot attended a debate on the issue held yesterday by the law faculty of Chulalongkorn University.

Sakda Thanitkul, associate professor at the faculty, said the Internal Trade Department had requested the faculty hold the debate to discuss how major foreign retailers could operate in Thailand without hurting small retailers or their communities. Represented at the debate were both large and small retailers, suppliers, consumers and academics.

"We would like all large retailers to agree to a temporary time-out and halt new store openings until an appropriate solution or fair rules and regulations has been formed," said Sakda, adding that Thailand's retail market had become unbalanced since large foreign operators arrived in 1997.

"During 2001 and 2002, the number of small retail shops declined drastically by 43,706 or 15 per cent of all small retailers in the kingdom. Their annual sales have also dropped by 7 per cent each year from 1996 to 2002," he said.

Sakda went on to say that the so-called hypermarkets' practice of selling products below cost price should be investigated by the authorities as it was in breach of business competition laws and had a huge negative impact on small retailers.

"Both short and long-term solutions should be drafted to allow fair treatment of foreign retailers investing in the country as well as protect small and medium-sized retailers," said Sakda.

Thammasat University economics lecturer Wilawan Wannanithikul said major retailers currently occupied about 67.5 per cent of Thailand's market.

"Small retailers should adjust and not try to compete in the same track as large foreign retailers. There are some market segments for those small retailers to stay in. Small retailers should apply new management techniques in the areas of inventory, merchandising and display and accounting to save costs," said Wilawan, adding that it is time the country reintroduced the Business Competition Act, which has been frozen since 1993.

Thanapon Tangkananan, president of the Thai Retailers Association, said large modern retailers and small shop vendors served different customer profiles. He said that while 80 per cent of shoppers at hypermarkets came in their own vehicles, most visitors to small retailers would walk.

"We [large-scale retailers] help Thai consumers buy cheap products as we cut out the middle-man. We also help local retailers purchase merchandise for their shops at a good price. They can carry less stock in their shops and can compare the prices of hypermarkets and other middle men or individual suppliers," said Thanapon.

He added that modern retailers had helped Thailand's economy by creating jobs for more than 250,000 employees and doing business with more than 3,500 manufacturers and suppliers. Thanapon said that about 95 per cent of the products sold at hypermarkets were locally made and these included OTOP products.

Kwanchai Rungfapaisarn

The Nation