Tesco slaps £16m writ on Thai critic

A former Thailand MP who is now the Secretary-General of the Thai Chamber of Commerce is facing a £16m legal claim from Tesco for speaking out against the retailer in his home country.

In a speech to 150 activists, Jit Siratranont, 56, described the retailer's expansion into Thailand under the name Tesco Lotus as aggressive, but admitted that he made an error saying that the firm made 37 per cent of its income from the Far Eastern nation. But his speech, he claims, urged conciliation between Tesco and small retailers to head off the prospect of riots over the store's rapid incursion into the country.

Siratranont said: 'The aggressive policy of expanding business in Thailand, not only in the big cities but also in the districts and sub-districts, is a contentious issue. The large-scale expansion of the big retailers must be exercised with great care - not too aggressively and too rapidly - to reduce the potential tension, which could lead to serious conflict. There is also the need for the small retail traders to adjust to changes. Tesco Lotus must take all of this into account.'

Separately, Kamol Kamoltrakul, an academic, is also facing a legal claim for £2m from Tesco Lotus for an article he wrote in Bangkokbiznews. Kamoltrakul also criticized Tesco's 'aggressive' expansion but admitted he repeated the mistake of saying Tesco Lotus contributes 37 per cent of Tesco revenue.

The action has sparked criticism from British campaigners accusing the giant supermarket of being heavy-handed. Claire Melamed, at poverty campaign group ActionAid, said: 'It is worrying that, rather then enter into a dialogue with campaigners over the effects of its expansion, it seems Tesco would sooner just slap them with a lawsuit.'

A Tesco spokesman said: 'We have issued proceedings against two individuals in connection with a sustained campaign of false and misleading statements about Tesco Lotus in Thailand. The suggestion that profits from Tesco Lotus are not reinvested in Thailand is blatantly untrue. The reality is that we have invested well over £1bn. While we believe people are entitled to their opinions, it is our belief that in these cases Tesco Lotus was seriously defamed. Both cases are being dealt with by the Thai courts and we await the outcome. We regret that we have had to resort to this action and hope the matter can be resolved by agreement.'

Tesco's expansion in Thailand has attracted significant opposition and has become a major political issue.

Problems in Thailand for the UK's top retailer come as analyst reports suggest Tesco's new California-based convenience stores are missing sales targets by as much as 70 per cent.

Separately, analysts at Goldman Sachs have downgraded the retail giant, urging investors to sell Tesco shares, which fell to 386.75p on Friday, their lowest level since October 2006.

- The Observer (UK)

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The total of 18 million British Pounds in the 2 lawsuits = 1,147,812,767 Thai Baht

Its a difficult call with big stores taking over Thailand but the again the small stores really need to clean up their act.

Pretty obvious comment here--but, go to any of these big stores and the people are voting with their feet--every major supermarket is pretty packed and not just at weekends--I guess the Thais like them--maybe wrong.

haybilly, you got it in one.

I think this is great.

Bet that puke even shopped there and just wanted to get on the bandwagon complaining about how successful a big international chain could be in his beloved home turf.

A lot of these comments are little more than thinly-veiled Chinese xenophobia.

Let's remind ourselves of the behaviour of Tesco in the UK where there have been a number of instances of Tesco ignoring local planning regulations and, in colaboration with other stores, price fixing by Tescos.

Let's also remind ourselves that in the UK where Tescos do not have such easy access to punitive gagging legal actions Tescos are forced to answer their critics in open council meetings and public debate.

These legal actions are nothing but an attempt to silence people who get in the way of Tesco's profits.

Tesco LOTUS is a Thai Company
51% Thai owned...

no wonder....

You can be assured that the decision to proceed with this case was greenlighted from London. If it wasn't, Tescos overseas subsidiaries are out of control, which is an even more valid reason to boycott Tescos until they get their house in order.

I guess that if foreigners have that much control in Thailand...we'll all be able to OWN LAND soon...

Errr...don't think so.
These massive companies employ thousands of people which in turn must benefit the Thai people.
You owning land...will you be employing any Thais to work there ? Didn't think so. No benefit to the country really.
Farangs would drive the property prices out of reach to the average Thai.
What they are doing is actually correct.

One wonders though about safety of a Tesco rep at a Thai 'public debate'. From what I've seen on telly and listened to on the radio, a public demonstration usually involves pretty nasty, racist and xenaphobic language used by the representatives of the 'mom and pop' stores. These rallys are usually led by pominent locals who decry the sale of thailand to foreigners (that putting it nicely) and that those who represent them as in Bangkok slave dogs.

This is what the other side is getting away with here, so regardless of their tactics in the UK - which aren't to be condoned - you'd say Tesco's are within their rights to stick up for themselves here.

I fear I'm responsible for any misunderstanding.

As a non-Brit and being totally unfamiliar with Tesco or Tesco Lotus until arriving here, I thought they were all interchangable.

To clarify, as the actual OP report clearly states, it is Tesco that is suing the Thai critics, and not Tesco Lotus.

I apologize for inadvertantly adding Lotus into the title when I wrote it....

(can a Mod please remove it)

There's a 16 mil. GBP claim from Tesco and a 2 mil. GBP claim from Tesco Lotus. Confusing, ain't it?

Wow, TESCO must be trembling.
I usually perfer Carrefour but since your are making a campaign out of this I might switch to Tesco (and won't carrefore be missing my business!)

TIT

Local Tesco Lotus is the biggest mismanagement mess I've ever seen, even after recent renovations. Employees packing shelves while the store is already filled with customers where they replace stocks when what is left could actually last another two days, cardboard boxes strewn across alleys where no one can go through, dirty shopping carts that are practically never washed, all the way to the entrance are sewer and shit smelling parking lots designed where exiting cars have to cross the line of cars entering, women spreading germs all around the store with black mops without a bucket of clean water, open meat counters where customers with unwashed hands and nose pickers can't help touching the meat as they walk by, stock missing week in week out, defective items on shelves or with missing parts and on and on. No shame , no pride. Even the local Tesco Lotus Express with it's soi dogs sleeping across the entrance door is a total mess when compared to the sparky clean 7-11 under the same roof.

I'm amazed that this total chaos is tolerated overseas and allowed to happen under the Tesco name.

Sue me.

This post has been edited by Tony Clifton: 2008-03-17 11:34:04

Your right entirely............just as it's my right to decide where I shop and spend my money. And right now, I will NOT be spending any more of it in Tescos, where over the past 6 months I've been spending I'd guess about 20 - 30 quid per week on average. No big shakes to a mega-company admittedly, but it's all money not in their tills but in their rivals' and the excellent local farmers market, plus goodwill lost. Which if any company worth its salt will tell you, is easy to lose, but very hard to regain. Companies I've complained to in the past about their environmental record or just bad service, have gone out of their way on occasions to try and regain it with grovelling letters of explanation and even the odd freebie or two.

Added to which I will ask friends and family to avoid Tescos, due to their arrogant and bully-boy attitude in Thailand, using legal suits to try and silence critics. Hopefully, some of them will join me and a boycott by many will ensue, if Tescos don't drop the case. This will not go down well with the growing consumer rights advocate's groups in UK, who dislike the monopolist-attitudes of the big supermarkets like Tescos and Asda in any case.

Like Supinya's case, the sum of money is out of all proportion to the matter.

I remember reading one article on the internet (msn i think),that described these supermarket companies as mafia like,with evidence of them screwing their suppliers down to the last penny,& they can get away with it as there are plenty of other suppliers waiting to fill the gap.

While it's hard sometimes on the little mom and pop shops, it's probably in their long term interests.

I'm pretty sure the guys standing accused knew exactly what they were doing. Let's face it they're probably also doing it for their own personal interests, rather than those of the little man in Thailand. Probably just not happy with someone else sticking a finger in "their" pies. Companies like Tesco are creating jobs, redistributing wealth, and breaking monopolies as they diversify. They also alow the average Thai to make their purchases at cheaper prices, freeing up their hard earned cash a little, something they very much need.

The ruling elite would probably rather have the poor mom and pop shops stuck as they are, making peanuts, with the real money earlier up the chain in their hands.

This post has been edited by AFKAFSinLOS: 2008-03-17 19:38:34

First of all, I would point out that this thread is primarily about the rights and wrongs of Tesco slapping a multi-million pound lawsuit on an individual for speaking out about the company's business practices in Thailand, NOT the business practices themselves.

But, as you raise other issues, I would also point out that it is a proven fallacy that:

a/ supermarkets create jobs
b/ that they redistribute wealth (from rich to poor presumably?)
c/ break monopolies

The opposite is the empirical truth, in whichever country you care to look, and to suggest otherwise would be to ignore self-evident reality. Furthermore, because the supermarkets seek to destroy small, diversified businesses, the initial small saving they offer initially is soon replaced by higher prices, once they have gained a monopoly position in the local market. This one can clearly see to be true by monitoring the changes in fuel prices offered by supermarkets in any British town where a supermarket has offered "cut-price fuel", only to bump it up to equivalent prices to what remains of independent competition and put countless small fuel stations out of business. So now, rural people have to travel miles to find a fuel station, negating any savings they could have ever made by trying to save 1 or 2 p per gallon when there was a price war going on.

Simply put, supermarkets are bad news for consumers who prefer diverse retail outlets in towns, with many independents. They are also bad news for Thai wet markets and small independent shops just the same. They concentrate wealth and power in the hands of distant shareholders, who will often resort to foul means to protect those interests, as is illustrated by this case. A consumer boycott is the only language these would-be monopolists understand and fear.

The US allowed itself to be sold-out to the likes of Sam Walton and has paid the price heavily in terms of lack of choice and nameless faceless malls, where the kids are brainwashed to consume, consume, consume.................UK and Thailand are in danger of following down that path, unless the consumer wakes up soon to the threats these places pose! Rolling over and saying, mai pen rai, is not an option!

An interesting link for those who didn't want to say mai pen rai.....

http://www.guardian.co.uk/business/2006/feb/22/supermarkets1

This post has been edited by plachon: 2008-03-17 23:30:02

Never a truer word has been spoken.

In a strange way, I feel that the only way for Thailand to realise the devastating effect that "supermarkets" have on society, is to lose against Tescos' legal action. My hope is that the people of Thailand will then, & only then, be able to clearly see what a total disaster these leeches (supermarkets) are.

Take my home town, which is very small, for example. Years ago, bread, fruit/veg & milk was delivered by horse & cart. If you wanted meat, you went to Cliftons Butchers, where you were greeted with a smile & addressed by your preferred name. Also, your personal meat preferences were remembered by the friendly & talkative staff. The same thing happened at the local pharmacy (Tony Ryan), the local post office (Gordon Morrison) & etc etc. If you were an older person or a bit "fragile", these people would make sure that your purchase was delivered to your door...free of charge. In these places, you weren't greeted by a "salesperson", you were greeted by an understanding human being...somebody you knew & trusted.
Ok, this works well in a small country town but things were not much different (excepting delivery charges) for the bigger cities...until supermarkets came along.

Within the first year of their presence (in my small country town), almost all of the butcher shops, hair dressers & pharmacies had closed, which meant "no more custom cuts" & no more special delivery. Old Mrs Hancock & many elderly people like her, who had relied upon the close proximity of the local vendors, now had to catch buses & carry huge loads over long distances. Going shopping was no longer a "social" experience...it was expensive drudgery & a potential health risk. These elderly people eventually felt "unsafe" about going shopping due to the throngs of teenagers that hung around these supermarkets.

Some years after the advent of these "anti-social" supermarkets, people began to realise that quantity had clearly replaced quality, & as such sought to regain some of that quality. The demand for quality rose enough to inspire a few people to open butcher shops, who offered the same old fashioned "quality service & products". These businesses, few as they are, thrive & are slowly expanding. The same story goes for the countless other small businesses that have been bullied out of business by the shareholder controlled & therefore quantity driven supermarkets.

What goes up must come down. Unfortunately, the realisation of "quality is preferred to quantity" only happened as the result of supermarkets gutting small businesses. If only Thailand could take a lesson from this, there would be no need for such a disaster to happen.

The bitter taste of poor quality lingers long after the sweetness of a low price.

Excellent post. Took me back to my childhood in England when I was the teenager on the old sit up and beg bike with a basket on the front riding round the pensioners houses delivering the meat from the Co-op butchers on a Saturday morning. On one occasion I had to get an ambulance as one of my customers, a frail old lady was unconcious on the kitchen floor when I went round. She recovered but dont know what would have happened if I hadn't been delivering there.

Then came the supermarket a few miles away and within a couple of years the butchers had gone, along with the grocers next door and the newsagents round the corner.

The last time I was there there were hardly any shops left in the locality and no choice whatsoever anymore.

Also many markets are struggling badly. I came here from a market town. When I was a kid there were about 200 market stalls selling a great variety of stuff, when I came here 2 years ago it was down to about a dozen stalls.

Hard to know what the answer is to stop it happening here in Thailand. It's bound to affect the mom and pop stores. Ironically the owner of my local store drives 45 km to the nearest Lotus every week to buy her stock for the shop!