Thai shoppers love Tesco’s cheap produce, except critics say its low prices are driving mom-and-pop stores out of affair

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The critics may be in actual possession of a point. Tesco Lotus’s superstore in Bangkok’s Lat Phrao district is certainly a world away from the scruffy mom-and-pop stores that used to serve the topical residents here.

Sitting amid an ocean of parking spaces, this tremendous fabric boasts a DVD store, a hotpot restaurant, made up of many American fastfood outlets, tinkers, tailors, ATMs and cell phone stands, and all that before you get to the vast aisles of the superstore itself. All under a single shelter. It’s cheap, clean and right next to the expressway.

A few kilometres more remote down the expressway is a new mini mall by a luxury supermarket for upscale Thais and expatriates, and a gaggle of restaurants specialising in cuisines from around the world. Tastes, like the times, are changing.

Tesco, Britain’s biggest supermarket retailer, is not the only international player on the exhibition here—Carrefour has extended had a presence end its Big C stores. But it is Tesco, expressions of gratitude to its success, that has be proper for the focus of intense criticism for its inclined to take the initiative marketing and expansion.

It is not an unfamiliar illness. Tesco has for years faced similar criticism in the UK, although the complaints are less about struggling small businesses and more about the moral qualities of the traditional British high street, with its friendly topical kill by thousands who knows honest how Mrs Miggins likes her Sunday roast trimmed.

Ironically, though, British shoppers are increasingly discovering that a bit of competition only hurts uncompetitive businesses. In grade of ancient stores, many high streets are at this moment hosting a new race of butchers and cheesemongers and delicatessens that sell high-quality local produce and instrumental foods, and are just as friendly as the old lot. Farmers’ markets are springing up too. The British high public way is indeed changing, but often for the better.

The criticism in Thailand is no less ironic, but it has been so ferocious of late that Tesco has taken the extraordinary step of launching a libel suit against Kamol Kamoltrakul, a business writer, and Jit Siratranont, vice general secretary of the Thai Chamber of Commerce.

Tesco’s request cites an article Kamol wrote in BangkokBizNews, which accused the retailer of using sneaky accounting tactics to dodge taxes and claimed that Tesco earned 37% of its income from Thailand, that would indeed have being an alarming piece of news if it were true. Kamol has conceded that he got that part wrong, inflating the real number by 10 periods after apparently misreading a figure in the company’s accounts.

He says that Tesco unfairly repatriates income to the UK by charging royalties to the Thai operation in exchange for management expertise and for the use of its brand and trademarks, that would succeed in avoiding Thai corporate taxes but still leaves the income exposed to UK taxes, which are about the same.

However, the mighty thrust of the complaint, made by both men, is that Tesco’s aggressive growth puts mean local stores out of business—the accusation outcome is a small piece of a red herring, given that it is a common application in opposition to most international brands operating in Thailand or anywhere else in the world.

But even this mom-and-pop outline is problematic. Tesco chief started doing business in Thailand in 1998 and now employs 30,000 people in 370 supplies, the tremendous majority of what one. are Tesco Express stores that compete directly with 7-Eleven, which has been doing mom-and-pop stores out of business across Thailand for 20 years.

One beginning says that Jit has a hidden agenda that he has succeeded in promoting to more local journalists. “He is playing a political game, looking towards the support of large businessmen up-country who cannot compete with Tesco,” he says. “Those who can’t compete always complain, but consumers aren’t querimonious. 7-Eleven isn’t complaining.”