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Last Updated: Wednesday, 27 September 2006, 10:37 GMT 11:37 UK
Tesco's Thai plans under threat
Thai shoppers in Tesco store
Tesco has more than 200 stores in Thailand
Thailand's ruling military leaders could restrict the expansion of Tesco and other retailers in the country.

Tesco confirmed it had been in talks with Thailand on Tuesday, but the meeting had ended without resolution.

The new Thai authorities are considering a new draft law to regulate the retail sector, reports have said.

But according to a Bangkok Post report, seven international names - including Boots and Makro - have agreed to suspend outlet expansion for 30 days.

Boots was unavailable for comment.

Local impact

The new Thai authorities hope the expansion freeze will give them time to assess the possible impact of big name expansions on nearby small shops.

We have every reason to want to carry on with the venture
Tesco spokesman

However, it is believed the stores that are about to start operating will be allowed to open on schedule to prevent disruption to recently-employed staff.

"There was not a particular resolution to the meeting but we are continuing to talk to the authorities and other people out there," a Tesco spokesman told the BBC.

"Our concept is successful there, the Thais like us and consequently we have every reason to want to carry on with the venture."

Earlier this month, before the recent military coup, the Thai government had warned that it was considering whether to stop new store openings by Tesco, French firm Carrefour and other leading foreign and domestic retailers.

The move was in response to demands for action from small shopkeepers fearful of being forced out of business.

Expansion drive

An expansion freeze would deliver a significant blow to Tesco, which has more than 200 stores in Thailand and plans to open 200 more.

The supermarket has expanded rapidly in the country since opening its first store there in 1998, and Thailand is now Tesco's single largest overseas market in terms of store numbers and total floor space.

Its Tesco Lotus joint venture has become the country's largest food retailer, operating 54 supermarkets, 15 discount stores, 15 Lotus markets and 189 Express convenience stores.

Its stores - which have a combined selling space of nearly seven million square feet - are located across the country, ranging from Chiang Mai in the north to Hat Yai in the south.

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