Attempts by country's leading department-store chain, Central Retail Corporation, to cut costs and increase efficiency are being threatened by a row over its new distribution centre.

More than 100 suppliers are refusing to deliver products to the distribution centre because they fear they will have to pay extra charges.

"Without cooperation from our suppliers, the distribution centre will not work and nobody will benefit from increased efficiency," said Tos Chirathivat, Central's chief executive.

He added that the facility would benefit 70 per cent of the retailer's small and medium-sized suppliers and should help Central cut its inventory handling costs which currently stand at more than Bt8 billion a year.

Central has 2,200 vendors supplying products to 30 outlets nationwide.