When the U.K.'s largest supermarket chain, Tesco, announced that it was selling its Thai and Malaysian stores to Charoen Pokphand Group, a gigantic Thai family conglomerate, for $10.6 billion, it was the biggest deal in Asia this year so far.

But for CP Group it represented a particularly sweet victory. It did not just bring Tesco Lotus hypermarkets back to their founder, billionaire Dhanin Chearavanont, who sold 75% of them to Tesco after the Asian financial crisis in 1997-98. It was also a victory over Thailand's two other family-held conglomerates, liquor-focused TCC Group and retail-centered Central Group, who both wanted the stores.

What this fierce competition highlighted was quite how dominant these three companies are in Thailand's retail market. Taking back Tesco Lotus increases the concentration of power and raises difficult questions about the consequences of this deal for Thai consumers.

These three companies are dominant in Thailand in different segments. Central Group owns upscale supermarket chains Tops Market and Central Foodhall. TCC Group, one of Thailand's largest conglomerates with a portfolio that includes Thai Beverage, has Big C hypermarkets which focus on mass retail. CP Group runs 7-Eleven, a convenient store chain with more than 12,000 store locations, and Makro, a business-focused cash-and-carry store.

For each company, buying Tesco's stores would have been transformative. If Central Group had won, it would have expanded from upscale to mass market. TCC Group would have taken 100% of the low-priced mass retail market. And CP Group will now be a leader in three major segments of Thailand's food and grocery market: convenience, business-to-business and low-priced.

There are other advantages for CP Group. First, Tesco Lotus will strengthen its strategic supply chain. Since CP Group's core business is rooted in food and agro-industry, Tesco Lotus is an important retail channel for CP Group's products. If its rivals had won, CP Group would have needed to search for substitute channels.

Tesco Lotus is a valuable property play too. It has almost 200 large-format stores, roughly 200 medium-sized supermarkets and more than 1,500 mini-supermarkets, mostly in prime areas and locations. Land is scarce so their value will rise.

Finally, this deal covers not only Thailand but Tesco stores in Malaysia as well, allowing CP Group to expand abroad.

Will this deal be good for all stakeholders, particularly consumers, though? In theory, competition between Tesco and Big C will lower prices.

But consider the bargaining power of suppliers. Over the last two decades, most manufacturing brands have lost power while retailers have gained it because of the expansion of retailers through tens of thousands of store locations across the whole country. Most Thai consumers primarily value convenience and shoppers often purchase products and services based on their accessibility.

The entrance to a Tesco Lotus retail shop in Bangkok, pictured on January 18: Thai shoppers often purchase products based on their accessibility. © Reuters

Consequently, suppliers are likely to suffer from CP Group's market power now that it is predominant in all major market segments. In fact, retailers also compete with their suppliers by launching and expanding own-brand products which can generate higher profit margins.

So far, retailers' private labels have not been popular with Thai consumers, making up less than 10% of total sales, compared to more than half in the Western. The power of accessibility and convenience which Thai consumers prefer will force shoppers to buy private brands, rather than suppliers' national brands.

There is also a chance that Tesco Lotus and Big C might not want to compete as strongly as you would assume. Both their parent companies have businesses earlier in the supply chain, CP Group with food, TCC Group with alcoholic and nonalcoholic beverages. It would be of mutual benefit not to drive down prices too much for those liens.

This deal raises the question of whether it is time for the government or a fair trade commission to take a closer look at this industry. As CP Group's market power develops tremendously, it may become too tough for new entrants to join and compete. In the long run, consumers will be the ones who suffer from this oligopoly.

Boonying Kongarchapatara, Ph.D., is Deputy Dean and Chair of Marketing Program at the College of Management, Mahidol University, Thailand.