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Published on January 5, 2008

Yangyong Phuangrach, director-general of the department, said that the ministry had received many complaints from manufacturers of plastic products and vegetable oil about unfair fees and regulations imposed by supermarkets. "The department will act as a middleman to create fair regulations for suppliers and supermarkets as both sides are unable to agree an acceptable compromise," he said.

Guidelines are also being drafted for rice packers and major supermarkets on fair trade practices.

The move comes as a result of rice packers' complaints to the department that supermarkets forced them to sell at lower prices and pay exorbitant fees.

Retailers Big C, Carrefour, Macro, Tesco Lotus and Tops Supermarket and the rice packers will sign a memorandum of understanding to create trading conditions that are fair to both sides before the end of this month.  In addition, the department is drafting a formula to calculate production costs and sales margins to create fair pricing.

The department will use this formula against the margins set by retailers and manufacturers to decide whether to allow any proposed price increases.

Yangyong said the formula would be adopted to cover other goods, particularly agricultural products, as this sector involves a large number of suppliers.

He said that this should give companies wanting to increase prices a clearer understanding of the circumstances in which they can. Consumers should also get a fairer deal, as they are less likely to be over-paying for goods.

Meanwhile, Yangyong said that the department would complete the drawing up of regulations for expansion by mega-retailers by the end of this month.

Although Tesco Lotus and Big C still disagree with the ministry's proposal to regulate major retailers, they must reach agreement soon as the proposals will create better understanding between large and small retailers, he said.

In the absence of a business law covering retailers and wholesalers, the agreement is intended to resolve the conflict between small and large retail operators.

The proposals would limit the location and opening hours for retail giants and commit small retailers to ending their campaign against their larger rivals.

Petchanet Pratruangkrai

 The Nation