Tesco

Last updated: 28 November 2008

Tesco – Sledgehammer Award for silencing criticism

Despite being one of the world’s largest supermarket chains, Tesco seems intent on silencing even minor criticism of its global expansion plans. This year, the British retail giant is suing three Thai citizens for an astonishing US$34.32 million (plus interest) after they spoke out about the impact of Tesco’s growth on local businesses and consumers.

Tesco have issued lawsuits on Jit Siratranont, Kamol Kamoltrakul and Nongnat Hanwilai for US$28.6m, US$2.86m, and US$2.86m respectively for comments made in local media about the retailers’ expansion in Thailand.

A numerical error, which has since been publicly corrected, and an editorial article doubting Tesco’s affection for Thai people enraged the retailer to the point of issuing the multimillion dollar lawsuits.

While Mr Jit is being pursued under criminal law, Mr Kamol and Ms Nongnat face civil suits. If Mr Jit is convicted, he could face a maximum jail term of two years under Thai criminal law.

All three cases are still working through the Thai court system, though the colossal sums of money means the defendants will most likely have to settle on Tesco’s terms. Efforts by civil society organisations in Thailand, including CI member, Foundation for Consumers (FFC), to persuade Tesco to drop these lawsuits continue.

Tesco’s expansion in Asia is determined and speedy.  According to the company's annual report, twenty-one per cent of Tesco’s profit in 2007 came from the region and they opened 106 stores in Thailand alone in the same year. This rapid expansion raises questions about the effect on local small business’ and consumer choice.

Public criticism of multinational retailers is not uncommon. Wall-Mart, Carrefour, and Tesco have faced objections in several countries for their impact on local retailers, worker salaries or reduced consumer choice.

Attempting to silence individuals in such a heavy-handed way, simply re-enforces big business’ reputation for disdain of local communities, indifference to the consumer’s right to information, and the pursuit of profit above all else.

Luke Upchurch, Consumers International Head of Media

“Trying to silence debate is certainly not the way to win the hearts and minds of consumers. These multi-million dollar lawsuits are a ludicrous overreaction by Tesco and will do little more than further harm the retailer’s reputation in Thailand and around the world.”

Check out all this year’s Bad Company Award winners:
Tesco, Kellogg’s and Lego, Eli Lilly, Samsung, Toyota

What do you think of the winners? Who would have you chosen?

Get further comment and share your own thoughts on the awards on the CI blog.