Amendments have been made to the market monopoly law, the Royal Thai Government Gazette announced last week.
The revised criteria came as part of the Office of Trade Competition Commission (OTCC)’s efforts to plug loopholes in big merger and acquisition deals.
The law is part of the Trade Competition Act of 2017 which stated that there are two criteria for a monopoly.
The first states that a business must amount a market share of more than 50 per cent of the market in the previous year and at least 1 billion baht in sales.
The second involves the merger of three businesses with a market share of over 75 per cent in the previous year and at least 1 billion baht in sales.
The OTCC said in June that the second criteria is problematic as it leaves room to debate whether the three businesses are supposed to have at least 1 billion baht each in sales or if only one business requires it.
They said that if the market share exceeds 75 per cent after the M&A then the merger should be ruled as a monopoly.
The Royal Thai Government Gazette then announced on September 25 that the calculation for the market share and sales in the previous year in the second criteria should be based on the combined market share and sales of all three businesses.
Sakon Varunyuwatana, OTCC’s chairperson, said in June that the amendment of the monopoly rules has nothing to do with Charoen Pokphand Group’s (CP)’s acquisition of UK-based Tesco’s Asia businesses in Thailand and Malaysia.
The merger in March, which was valued at US$10.6 billion, has prompted public concern as CP already owns 7-Eleven stores and Makro Cash and Carry.
With the acquisition, the group now owns 87 per cent of Tesco’s stores in Thailand which has given them a lot more bargaining power. Critics are now saying that such a development will put small suppliers and farmers at an even more disadvantaged position.
CP is now a market leader in poultry and shrimp with their own cash and carry business. The conglomerate is also being allowed to produce similar products to SMEs’ goods with its own branding to actually compete with suppliers as well, critics added.
Another potential monopolistic deal that was on observers’ radar back in March was the Bangkok Dusit Medical Services (BDMS)’s move to acquire Bumrungrad International Hospital (BH) before the former scrapped the takeover plan because of the coronavirus pandemic.