hankyoreh

By Kim Su-heon, staff reporter

The revision bill of the Distribution Industry Development Act was passed by the Knowledge Economy Committee of the National Assembly on Nov. 16. According to the bill, the compulsory closing day for super supermarkets can be extended to three days a month at maximum and the limitations on business hours can be increased by four hours over existing limitations. The Distribution Industry Development Act, considered a primary bill related to economic democratization, will now go to the plenary session of the National Assembly in a greatly strengthened form.


The revised bill decided on by the Knowledge Economy Committee expanded the current compulsory closing day for big-box retailers, or super supermarkets (SSMs), of “more than one day but no more than two days a month” to “more than one day but less than three days a month.” The obligatory cessation of business from midnight to 8 a.m. may be increased to 10 p.m. to 10 a.m.

The bill stipulates that SSMs established in shopping centers or multiplex shopping malls, which were previously free from regulations, will be subject to compulsory closing days and limitations on business hours. The specific number of closing days, dates, and limited hours of operation will be decided by the ordinance of local governments.


The revised bill strengthened the laws currently on the books, but leaves room for controversy as it stopped short of the level set forth in many other proposals, including the party platform of the Democratic United Party (DUP) in terms of the number of mandatory closing days and limits on business hours. That compulsory closing days or limited operation hours are implemented according to the ordinances of local government as existing laws rather than enforced by legislation is also likely to spark controversy.

Local governments will decide if the compulsory work stoppages are one or two days (not three days). The closing days must be during weekdays, not on Sundays. In this area, the level of regulations may actually turn out to be lower than current regulations, which stipulate closing on the second and forth Sundays of the month.


The revised bill also failed to eliminate a clause that grants exceptions to Nonghyeop’s Hanaro mart. The subcommittee that handles the deliberation of bills at the Knowledge Economy Committee agreed on Nov. 15 on raising the standards for exceptions from operation regulations from the current standards that agricultural and fishery products sales account for 51% of the entire sales, to more than 60%. However, during the meeting Friday the standards where again lowered to “more than 55%” due to the objections of some committee members. Therefore, Nonghyeop Hanaro Mart is likely to operate free from the regulations in the foreseeable future.

The “permit system” of SSMs that DUP presidential candidate Moon Jae-in repeatedly pledged to introduce at every visit to a traditional market was not reflected in the revised bill either. Instead, the revised bill stepped up the registration requirements for SSMs to apply for establishment by forcing them to submit an assessment report appraising the influence on the neighboring business district and a plan for district cooperation, and by allowing local governments to ask for additional work when they judge the reports to be insufficient. The revised bill also introduces “advance notice of the opening of a new retailer outlet,” which inform the head of local government 30 days prior to a registration application. This system has been proposed by Saenuri Party (NFP) presidential candidate Park Geun-hye.


On the revised bill, the National Headquarters of Economic Democratization, the National Network to Save Small and Mid-sized Merchants, and the National Association of Distribution Merchants issued a joint declaration stating, “Even with some meaningful improvements, including the increases in limitations on operation hours, the bill failed to meet the levels demanded by the opposition party and civil groups due to the passive attitude of the Saenuri Party. Further measures must be considered”.

Meanwhile, the Chain Store Association of large-scale retailers showed strong resistance by saying, “If regulations are changed by the revised bill, the annual sales of large-scale supermarkets and SSMs will be reduced by 6.986 trillion won and 862 billion won (US$6.4 billion and $790 million), respectively.”

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