30 April 2007
The Thai Cabinet has rejected the first proposed draft of the Wholesale and Retail Business Act ("Bill"), Thailand's first ever retail business law. The Ministry of Commerce ("MOC") is currently revising the draft, after it was rejected by the Thai Cabinet on 27 March 2007. The next draft will likely take into account the comments made by the Cabinet that the draft Bill should be clear and balance the benefits of all retailers and wholesalers. The draft Bill will be revised and amended by the MOC with consideration to the comments and suggestions from retailers and wholesalers and the MOC will submit the draft Bill to the Cabinet again for consideration and approval in the near future.
Due to the huge growth of the wholesale and retail business in Thailand, attempts are being made to regulate the industry by issuing laws governing the wholesale and retail sector. The first draft Bill was drafted during the former government's tenure but it was rejected in 2004.
Calls for the introduction of a Wholesale and Retail Business Act have come from affected local retailers who have demanded that curbs be placed on large retailers from opening new outlets in certain areas.
On 22 February 2007, the Ministry of Commerce submitted the Bill to the Cabinet. Pursuant to the Bill, a body called the Central Commission Controlling Wholesale and Retail Business (the "Commission") would be established. The Commission would have powers and duty to: (i) set out policy, measures and plans to systemise and supervise wholesale and retail business operations; (ii) prevent and rectify any adverse affects on wholesalers, retailers, manufacturer, agriculturists, public, community and environment; and (iii) implement measures for promoting and developing wholesale and retail business for benefits of commerce and economic of the country and competitiveness. In this regard the Commission would have the power to:
- Announce which types of business (having characteristics and size as prescribed by the Commission) are the controlled businesses and fixing the area that the controlled businesses can be located and operated;
- Prescribe measures for promoting and developing wholesale and retail business;
- Prescribe measures, rules, methodology and conditions in relation to: (i) the establishment, change, expansion or reduction of wholesale and retail businesses; and (ii) preparation of assessment reports covering the impact on the businesses nearby, community and environment;
- Prescribe rules, methodology and conditions in relation to trade in order to prevent unfair trade practice;
- Fix date and time for outlets to be opened for trade;
- Prescribe measures for controlling charging unreasonable fees among business operators;
- Order prohibitions on the sale and/or order products recall; and
- Require the retail and wholesale business operators to arrange and implement preventive measures and to rectify any adverse affects arising from their business operations.
The Bill was however rejected by the Cabinet on 27 March 2007 which suggested that the MOC should revise the draft Bill and make the details clear with respect to the powers and responsibilities of the Commission as well as to expand the power of the provincial commission to each location as appropriate. Public hearing should be held to listen to the opinions and comments of both small retailers/wholesales as well as the large corporations to examine methods of management of the industry to make it clear and fair to all.
After the Cabinet rejected the draft Bill, on 23 April 2007 the Ministry of Commerce organised a meeting with representatives of modern retailers, local state authorities involved with the proposed regulations, retail-related associations and members of the Federation of Thais Opposing Foreign Retailers in an attempt to conclude details of the draft. Most of the participants, except large retailers, agreed that the act should be implemented to balance benefits to all parties, whilst protecting small retailers. The issues which were discussed involved details of service hours, zoning, conditions of expansion and regulations to eliminate unfair trade practices between giant retailers and their suppliers as well as mandatory distances between the retail giants and the smaller retail operators should be included in the draft.
The draft bill is to be revised and amended by the MOC according to the comments and suggestions obtained from the retailers and the wholesalers. The MOC will submit the draft bill to the Cabinet in the near future for consideration and approval.
Retailers and Wholesalers of all sizes eagerly await the revised draft as well as the Thai Cabinet's decision on the same. In the meantime, there have since been a number of protests on the content of the same.
For further information, please contact:
Phone: +662 677 7580
Fax: +662 677 7599
Phone: +662 677 7574
Fax: +662 677 7599