The Internal Trade Department is closely monitoring whether superstores have violated competition regulations by using their market dominance to press suppliers to sell their products at unfairly low prices.

If it is the case, the superstores would violate a clause under the retail guidelines stipulated by the Commerce Ministry.

The guidelines will be part of the country's first Retail Business Act, which the ministry is planning to propose for the Cabinet's approval soon.

The new law will protect small suppliers with limited bargaining power against big retailers that might force them to sell products at very low prices.

Deputy director-general Vatchari Vimooktayon said yesterday that the department would inspect whether some retailers have exercised market dominance to gain unfair profits.

This would be to ensure fair practice for consumers in the long run and to protect small retailers from being forced out of business by retail giants, she said.

It is also part of the department's responsibility to investigate cases in which suppliers and manufacturers have filed complaints accusing large retailers of price dumping.

Under the department's guidelines, any retailer found to be dumping to weaken competition could be punished under Article 29 of the Trade Competition Act 1999, which prescribes maximum penalties of three years' imprisonment or a fine of Bt6 million or both.

Earlier, the Thai Retailers Association had accused the department of not protecting consumers.

Vatchari explained that the department had to implement regulations to ensure fairness for both consumers and businesses.

The price-dumping regulation would benefit consumers in the long run. Although some consumers might think that lower prices at superstores would benefit them, retail giants would eventually control the market and quote higher prices to hurt consumers, said Vatchari.

In addition, large retailers might charge inflated prices for products that consumers were not aware of.

Meanwhile, a group of small retailers from the northeastern province of Udon Thani submitted a letter yesterday to the director-general of the department, Siripol Yodmuangcharoen, asking for the government to prevent Tesco Lotus from expanding into its community.

Tesco is constructing a retail outlet at Baan Phue district in the province.

Somboon Thongtip, a representative of retailers, wondered whether Tesco's expansion might breach the city's planning laws as the population in the area was lower than 10,000.

He also called for the municipal office to stop Tesco's plan since it would hurt more than 200 local retailers.

Petchanet Pratruangkrai

The Nation