Under the new law, local governments would assess and approve any proposed new branches of supermarket chains in their province.

A new central body -- the Retail and Wholesale Supervision Committee chaired by the commerce minister -- would also be set up to regulate the retail business nationwide.

The bill marks Thailand's latest effort to tighten the rules on foreign businesses here, after the government in January moved to limit foreigners to holding no more than 49 percent of the shares or voting rights in Thai companies.

The retail measure was initially rejected by cabinet, which complained that the central committee would have too much authority to regulate retailers, but the cabinet on Tuesday gave a revised version the all clear.