Tuesday, April 22, 2008

Thai Critic of Tesco in UK

Tesco won't be happy. Kamol Kamoltrakul, one of the Thai men currently being sued for defamation by Tesco, is currently in the UK as a guest of Index on Censorship. From The Guardian:

Kamol Kamoltrakul wrote one of his monthly columns in a Bangkok business paper last year on Tesco's aggressive expansion in the south-east Asian state. The threat from western superstore chains to Thailand's thousands of "mom-and-pop" retailers has been a controversial issue there for the past seven years.

His own English translation of his article, which he hands over, does not read in a particularly inflammatory style. It does contain a mistake: Kamol says: "The shocking truth is that 37% of [Tesco's] income comes from Thailand." And he goes on to make the case that Tesco's Thai profits are mostly returned to the UK "because of the complexity of accounting which can deduct a lot of expenses and show low profit". Kamol now says the 37% figure was a slip based on a misreading of figures and the correct number is more like 3.7%. But on the more general point, that Tesco ships profits out of Thailand, he claims: "I think I'm right." An economist by training, he says the limited information in the company's local financial reports suggests, for example, that they pay hefty royalties to their parent for use of the Tesco name.

Tesco said yesterday that royalties were charged by Tesco Stores Ltd to its Thai operations and to other foreign operations "for the provision of know-how and the use of brand and trademarks". This was described as "perfectly normal practice" in compliance with all relevant tax laws and agreed with both UK and Thai tax authorities.

Tesco said yesterday: "Tesco does not have a policy of using legal action to silence its critics. In fact until now we have never had to issue legal proceedings to defend our reputation. The ongoing cases in Thailand and the UK are entirely unrelated. Neither has anything to do with restricting free speech and it would be deeply misleading to suggest they do. The right to free speech does not of course imply the right to defame us.

"In Thailand Tesco Lotus has been seriously defamed in a sustained and malicious campaign over a number of months. In the UK, the Guardian made a series of very damaging allegations relating to Tesco's tax affairs despite our clear indications to the paper in advance that these were utterly false and that we would defend our reputation if necessary. The Guardian was given the opportunity to retract the allegations but chose not to do so.

"In both cases we have been left no option other than to take legal action - a step we would not consider unless we believed it was entirely justified. We still hope the matters can be resolved by agreement, but if not we will have to resort to the courts to restore our reputation."

This is the line that Tescoo has been sticking to ever since their actions have been revealed to the public. I wrote to Tesco and complained about their attempts to suppress free speech, threatening to boycott their stores until they drop the action. The response was essentially lifted from a statement prepared by their spokesperson (click on image):

There is no justification for this action. The consequences of a successful claim by Tesco is particularly worrying. Should they succeed, attempts to criticise large corporations, debate their impact on society or question their business practices will be seriously compromised. Considering the power that these organisations have in this increasingly privatised world, that should be a concern to everyone, Tesco shopper or otherwise.