Thailand Adopts Local Planning to Control Superstores

Date: 1 Apr 2003 | posted in: Retail | 0 Facebooktwitterredditmail

The Thai government has issued a new directive designed to control the expansion of superstores. The measure requires provinces to establish committees to draft new planning rules that stipulate where large-scale stores may locate.

The directive covers all of Thailand’s 76 provinces, except Bangkok and three other major cities, which already have zoning in place. The government estimates it will take three years to implement land use planning nationwide.

The directive was adopted at the request of the Commerce Ministry, which has been fielding complaints from small businesses about the rapid expansion of superstores and their predatory tactics. Foreign-owned retailers, including the UK’s Tesco and Frances’s Carrefour and Big C chains, have made major inroads into the Thai economy. An estimated fifteen percent of the country’s small stores have closed in the last five years.

Small retailers say the new rules are too little, too late. They condemn the government for abandoning more stringent legislation in the works for almost two years. Those regulations called for establishing councils in each province to determine whether superstores were needed at all—rather than simply restricting where the stores can locate.

The government dropped the legislation last November, citing concerns that the rules could be challenged by France and Britain under international trade agreements.

The Interior Ministry organized an educational conference in February to teach local officials how to use zoning to control the growth of superstores. The government also created the Allied Retail Trade Company, which reduces costs for small retailers through volume purchasing. About 19,000 businesses have joined.

Other Asian countries are likewise grappling with a surge of global retail corporations. Two months ago, China issued a new directive requiring all local governments to implement land use plans. Retailers seeking to open new outlets will be required to submit their proposals to local councils, which will hold public hearings and decide whether the store is needed. The rules are designed to prevent over-building of retail space and unhealthy competition. Wal-Mart, Carrefour, and the Dutch chain Makro, have been expanding rapidly in China.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.