7-Eleven — blessing or curse for Thailand — Satang.info

News

7-Eleven — blessing or curse for Thailand

In Thailand, 7-11 convenience stores are becoming ubiquitous. While many appreciate the fast and accessible services, impacts on small business and local suppliers are mixed.

Thailand has a love affair with 7-11. To date there are over 11,000 stores within the country, serving over 11.8 million customers daily. Nearly 5,000 of those stores are in the Bangkok Metropolitan Region alone. By comparison, the U. S. boasts just over 9,000.

Although the company is headquartered in Dallas, it is owned by the Seven-Eleven Japan Company, based in Tokyo. In Thailand, the chain is a subsidiary of the local CP All group. In 2018, CP All reported revenue of over 500 billion baht (US$15 billion).

In the Land of Smiles, 7-11s offer more than snacks. Patrons can pay utility bills, buy postal services, and book international and domestic flights. Limited banking services were rolled out in stores late last year. 7-11 has established itself in Thailand as a cornerstone of daily economic life.

But with this large array of services and products comes a responsibility to ensure that negative social impacts are mitigated. While 7-11 in Thailand has clearly figured out how to maximize convenience and accessibility, it has had a mixed record on adopting ethical business practices, especially for suppliers.

Number of 7-Eleven stores in Thailand

Number of 7-Eleven stores in Thailand

SME partnerships and relations with street food vendors are positive

7-11 has made an effort to partner with small and medium-sized enterprises (SMEs). According to the company, there were approximately 2,200 SMEs selling products in their stores in 2017. The total number of suppliers hovered around 6,000.

Several ongoing SME programs support the livelihoods of local farmers. One such program is the Golden Banana Project, which partners with small farms to sell certain types of bananas in stores across the country.

7-11’s relationships with street food vendors should also be applauded. While some argue that the influx of 7-11s uniformly disadvantages small vendors, the reality is more nuanced. As Thais have come to depend on 7-11 for a significant portion of their daily needs, street food vendors routinely set up shop just outside its doors. As 7-11s increase foot traffic in a particular area, vendors are able to count on a steady flow of potential customers.

Echoing this sentiment, a local food vendor told ASEAN Today, “It’s good [for me]. It’s open 24 hours. When people come out, some of them buy from me.”

7-Eleven — blessing or curse for Thailand

Not all suppliers are treated fairly

Some local suppliers in Thailand partner with corporations under a system known as contract farming, which involves an agreement between farmers and companies for the steady supply of agricultural products.

While contract farming can confer advantages to local producers by promoting increased market exposure in the globalised economy, the risk of exploitation is significant.

Paisit Panitkul, a law professor at Chiang Mai University, says contract farming is often unethical in practice: “Contract farming represents a form of disguised exploitation, with companies taking all benefits from selling seeds, livestock, animal feed and farm equipment. Everything generates huge profits for agribusiness.”

CP All uses its leverage as a large corporation to push unfair contracts on local suppliers. Wilaiwan Khammi, a second-generation fish farmer in Maha Sarakham Province, was left with debts of over 1 million baht ($31,000 USD) after ending her contract with CP. Her family was under contract to buy fish and fish feed from the company to maintain their stocks. But after the fish started dying, she was not compensated for her losses and couldn’t sell enough to make back the money. Although locals claim the deaths were a result of the poor quality products they were sold, the true cause of death is unknown. CP All refused to take responsibility.

She recalled feeling pressure to adhere to the contract. “We felt sad because there was this option to make more profits for our families, but we couldn’t choose it. You have to sell to CP even though you’re not happy or satisfied.”

7-Eleven — blessing or curse for Thailand

Moving forward, suppliers and workers need a better deal

Despite some pushback over monopolization in recent years, 7-11 remains hugely popular in Thailand. The combination of convenience and immediacy — along with the sheer size of the operation — ensures that it will continue to be a prominent force in the Thai economy.

But CP All needs to double down on the protection and prosperity of all stakeholders, including its contract farmers, suppliers, and workers.

For the past three years, CP has published its annual sustainability report, outlining company policy toward social and environmental responsibility. The company implemented human rights assessments to cover the entire supply chain and projects to reduce plastic bag usage. It also extended insurance to small-scale contract farmers to help manage risk and ensure economic stability.

These are positive steps, but more should be done. Most pressing is the need to formally unionise its workforce. Collective bargaining mechanisms would strongly benefit store workers, many of whom are low-income individuals.

Contract farmers should also have the freedom to make business decisions that are in their best interest. If a producer wants to use different feed or fertiliser, they should be able to without fear of reprisal. Likewise, fair arbitration standards should be adhered to in cases of conflict and reasonable contract termination channels should be available.

Given its power and influence, CP has an advantage over small farmers and everyday workers. As growth continues, they need to be treated as valued partners, not just a means to an end.

Business, Interesting

You may like these posts

Gambling in Thailand — Underground Thai Lottery

Gambling in Thailand is for the most part illegal. Outside of the official Thai lottery, gambling on the outcome of events such as Muay Thai, football and cock-fighting are all il… Read more

Thai elephant deaths: Do elephants risk their lives to save each other?

At first only six elephants were thought to have died  — days later another five were spotted downstream. The initial theory from park rangers in Khao Yai National Park was that… Read more

Bangkok readies for Asean Summit

Japanese Prime Minister Shinzo Abe, South Korea’s President Moon Jae-in and Chinese Prime Minister Li Keqiang, are among the leaders who will join the three-day summit starting on… Read more

Traditional Thai Massage

I had heard of a traditional Thai massage a long time before I actually came to live in Thailand. Of course if you mentioned the topic in the UK amongst friends you usually got a … Read more

Weekend train excursions to Pa Sak Jolasid dam from Nov 16

Ekkarat Sri-arayayanpong, head of SRT public relations, said on Thursday the round-trip weekend excursions on the Bangkok-Pa Sak Jolasid route would run on Saturdays and Sundays f… Read more

Cock Fighting in Thailand — Thai Fighting Cocks

Cock fighting in Thailand is legal and very popular in many areas, particularly in the rural North/North East. On the other hand gambling is illegal in Thailand, save for the nati… Read more

Thailand police officer arrested for allegedly stealing 50 service pistols

Police Senior Sgt-Major Charin Butrdee has been decommissioned and faces investigation for disciplinary misconduct, deputy police spokesman Pol Colonel Krisana Pattanajaroen said … Read more

The Unexplained Phenomenon of Mekong Lights

This strange event happens yearly in late October to early November under a full moon sky. The lights are usually glowing red-orange balls rising out of the Mekong River. Hence, t… Read more

Thailand bans street liquor ‘yadong’ after toad venom deaths

After a particularly funky variant made with toad’s venom was blamed for two fatalities in Chonburi , the Excise Department on Friday said all yadong street stalls are illegal and… Read more

Thailand PM considers moving capital as Bangkok congestion takes toll

Thailand could be the next nation in south-east Asia to relocate its capital after Prime Minister Prayut Chan-o-cha hinted such a move could be a “possibility” under his governmen… Read more