Thailand has withdrawn plans to restrict the businesses of foreign retail stores over fears of trade retaliation from countries such as Britain and France.

The controversial legislation was proposed in order to regulate foreign retailers and protect the country's smaller retailers. Several smaller Thai-owned shops and suppliers had accused foreign retailers of unfair pricing practices. The Thai government announced in August plans to restrict the opening hours of foreign retail outlets in a bid to protect domestic retailers. The plans were dropped, however, because Thailand began to fear that some countries would retaliate under international trade rules, endangering Thai export sales.

Foreign-owned stores in Thailand have annual sales of up to 200bn baht (US$4.6bn). Tesco Lotus, the Thai unit of UK supermarket retailer Tesco, controls 31% of the Thai market. Big C, a unit of France's Casino, controls a 24% market share in Thailand, while France's Carrefour has 14%, reported Reuters.