Despite Cabinet approval on Tuesday for the draft retail business law, it still needs to be passed by the National Legislative Assembly. That will create a vacuum, allowing giant retailers to use the period for rapid expansion, the smaller players fear.

The ministry's building code will prohibit any operators from expanding and modifying buildings for any purpose.

Deputy Prime Minister and Industry Minister Kosit Panpiemras conceded yesterday that the retail business law could hurt investment. However, he added the effects should be minimal as most businessmen in Thailand realise that the measures are not aimed at keeping out foreign investment, but to create fairness to retail operators of all sizes - as well as consumers.

"During discussions, the Cabinet members agreed that the law is neutral enough," he said.

A source at the Commerce Ministry said small retailers had urged the ministry to accelerate the work of the Public Works and Town and Country Planning Department, and governors in every province to exercise their power under the city planning and building codes to curb retail and wholesale business expansion.

The retailers said yesterday that waiting for implementation of the law would be too late to halt the rapid expansion of giant retailers.

"Those laws under the Interior Ministry are the only hope for local retailers to survive," they said.

The city planning and building codes can control the construction of outlets of 300-800 square metres. But some giant retailers have diversified their businesses to outlets of less than 300 square metres.

The source said the Public Works and Town and Country Planning Department should quickly announce measures to halt the expansion of stores in Bangkok and nearby provinces. In addition, the governor of every province must do everything possible to curb the expansion of giant retailers.

At present, only three provinces - Nakhon Ratchasima, Samut Sakhon and Suphan Buri - have imposed individual city planning and building codes to curb the expansion of giant retailers.

According to a report, many mega-retailers in April and May continued to expand. For instance, Big-C opened its latest shops in Lamphun's Amphur Muang, Makro opened on Samui island in Surat Thani, and Carrefour opened in Chon Buri.

Phanthep Suleesatira, president of the Federation of Thais Opposing Foreign Retailers, said the Interior Ministry should hasten measures to restrict retail business expansion as many small communities are suffering because of the giant players.

He said urgent measures were essential to protect small retailers. The rapid expansion of giant retailers will damage not only traditional retail shops but also consumers in the long run.

He warned that retail giants would be able to monopolise the business and could adjust the  price of goods by pressuring suppliers.

Tesco Lotus senior vice president Darmp Sukontasap said: "We have yet to see the latest version of the draft law. However, we would still like to see a law that treats all parties involved with fairness and equality.

"The role and responsibility of everyone involved should be clearly spelled out, be they suppliers, wholesalers, or modern trade operators. Otherwise, suppliers and wholesalers will fully benefit from the law at the expense of modern trade operators, mom-and-pop shops, and more importantly consumers."

Petchanet Pratruangkrai,

Kwanchai Rungfapaisan

The Nation