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RETAILING
PHUSADEE ARUNMAS
The government is being urged to set up an arbitration body to settle growing disputes in the local retail industry which is threatened by rapid expansion of large, modern operators.
Charles Cheung, chairman of the competition sub-committee of the Board of Trade of Thailand, said the Trade Competition Commission should set up a new body to handle the disputes and enact new rules to prevent concentration and monopoly.
According to Dr Cheung, a few big retailers have a high bargaining power over suppliers and the traditional trade. They have reportedly set unfair trade terms such as relatively high entry, shelf and advertising fees, as well as delivery costs and extra fees or margins.
Although the Commerce Ministry set up the guidelines concerning trade practices between modern trade and suppliers in Section 29 of the Trade Competition Act 1999 covering 22 practices including trading without written agreement in advance, and unfair price setting, suppliers are not willing to rise up against the retail giants for fear of retaliation.
According to Dr Cheung, a survey in European and Asian countries found the governments in South Korea, Japan, Taiwan and the United Kingdom had paid more attention to manage the relationship between the big retailers and suppliers. He suggested that the Thai government improve the guidelines on trade practices in this respect because the large retailers have grown stronger at the expense of the suppliers and, ultimately, consumers, he said.
''The regulations should balance the power of the large-scaled retailers and their suppliers and set a standard for the whole industry,'' he said.
''Currently, it is good for consumers because the big retailers could sell cheaply. But these below-cost sales are hurting the suppliers, who can no longer afford to invest in research and development. This, in turn, compromises product innovation and quality and will limit consumer choices in the future.''
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