Tesco, a hypermarket where Malaysian shop for their groceries, has changed its name to Lotus’s Malaysia.
Users in Twitter pointed out on the social media platform that Tesco Malaysia stores are now distributing flyers announcing the name change to Lotuss Stores (Malaysia) Sdn Bhd.
Aside from that, other users have also realised the new name displayed on their shopping receipts and the new name displayed on the MySejahtera applications when checking into the premises.
Previously known as Tesco Stores (Malaysia) Sdn Bhd, the company sold its businesses in Thailand and Malaysia to Thailand’s CP Group entities. The Malaysia Trade Competition Commission (MTCC) approved Charoen Pokphand’s (CP) acquisition of Tesco Lotus in Malaysia in November 2020.
This comes on the heels of Thailand’s Office of Trade Competition Commission (OTCC) giving CP the nod on November 2 to purchase the retail giant.
This effectively helps CP Retail Development Co Ltd under CP Group own Tesco Lotus’s assets worth Bt338.44 billion in the two countries.
However, a news source from Malaysia reported that the MTCC stipulated that CP must increase the ratio of its SME partners to at least 10 per cent for 5 years, and must help promote local entrepreneurs in overseas market expansion. The commission has also allowed CP to hire foreign low-skill labours at a maximum 15 per cent of its workforce.
According to a CP All report submitted to the Stock Exchange of Thailand on March 9, CP All jointly invested in the deal at 40 per cent. The acquisition of Tesco Lotus in Malaysia will allow CP Group to own 46 hypermarkets, 13 supermarkets, 9 retail shops and 56 rental retail spaces under Tesco Lotus in Malaysia.
The OTCC previously held a meeting to address concerns highlighted by a minority of its commissioners who voted against the acquisition. The commission voted 4:3 in favour of the US$10-billion (Bt302.5 billion) takeover deal as this could give rise to a monopoly or unfair market dominance.
Pointers in the meeting, OTCC spokesman and minority group leader Santichai Sarathawanphaet pointed out that the commissioners who voted against the deal had four concerns:
- While the acquired party holds a large market share in wholesale and retail modern trade, the acquisition could affect Thailand’s economy as it could give rise to monopoly, unfair market dominance and socio-economic disparity, as CP is already the largest manufacturer of agricultural and consumer products that are essential to daily life.
- Consumers having fewer product choices as the acquisition could result in an obstacle for new entrepreneurs to enter the market, while other businesses would need to adapt their strategies by lowering their selling price and cost to remain in the market. As such, most of which are likely to be SMEs who cannot adjust will be forced to quit.
- CP will have more bargaining power against suppliers of raw materials and products as being the biggest player in the market while SME manufacturers will be at the downside when negotiating trade terms with suppliers.
- CP will have the ability to set its own prices in accordance with its needs and policies as the acquisition will result in fewer number of competitors, whereby in the long term consumers will have limited choices of products and prices.
Santichai said the commissioners who voted against the acquisition do not seek to oppose the majority vote after the decision was made but only need to notify the public of their concerns. “CP will have 60 days to appeal to the Administrative Court in case it disagrees with any part of the OTCC’s resolution or conditions,” he added.
It is remain unclear that the Tesco name will maintained or will be name to Tesco Lotus or Lotus but it is expected an announcement will be made soon by Tesco Malaysia.