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BANGKOK : Thailand's military-installed government on Tuesday endorsed a new retail law aimed at reigning in the expansion of foreign retail giants after an outcry by local shop owners.
Under the new law, local governments would assess and approve any proposed new branches of supermarket chains in their province.
A new central body - the Retail and Wholesale Supervision Committee chaired by the commerce minister - would also be set up to regulate the retail business nationwide.
The bill marks Thailand's latest effort to tighten the rules on foreign businesses here, after the government in January moved to limit foreigners to holding no more than 49 percent of the shares or voting rights in Thai companies.
The retail measure was initially rejected by cabinet, which complained that the central committee would have too much authority to regulate retailers, but the cabinet on Tuesday gave a revised version the all clear.
"Instead of having only one central regulator, the new law approved today will decentralise authority to provincial regulators and allow greater hearing of public opinion," said deputy commerce minister Oranuj Osathananda.
Supermarket chains, mostly foreign-owned groups like British company Tesco and France's Carrefour, have been locked in a row with the government and small stores, which complain the big retailers are driving them out of business.
More than 100,000 small shops have shut over the last decade due to rapid expansion of the chains, the commerce ministry says.
If the retail giants go against the verdict of provincial authorities or violate the law in any other way, they would face up to three years in jail or fines of three million baht (US$86,200).
Tesco in a statement urged the government to reconsider and to take into account the interest of consumers as it finalises the law.
"There do not seem to be any mention about the interest of consumers. Therefore, we would like to request the government to consider how this law will benefit them," Tesco said.
"The cabinet's approval of the draft law is just the first step in the process and we will continue to work with the government to explain the benefits that modern retail brings to Thai consumers and suppliers."
The draft law will now be sent to the nation's top legal experts before being submitted once again to the junta-appointed parliament for final endorsement.
In the meantime, the government will toughen its enforcement of existing zoning laws to slow the expansion of foreign retailers, a spokesman said.
"It will take some time before the retail law takes effect," deputy government spokeswoman Netpreeya Chumchaiyo told reporters.
"To immediately reduce impacts from rapid expansion of foreign retailers, the cabinet agreed to tighten the existing city zoning rules to regulate retail business first." - AFP/de
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