Red tape

Restrictions on big retailers need elaborate plan

In the past, easing regulations was the norm because of a popular belief that if civil servants meddled in private business, it would not benefit the economy. For this reason, presidential contenders often engaged in a competition of making pledges aimed at dismantling administrative red tape.

However, with economic polarization deepening and calls for economic justice gaining momentum, the opposite is true in present day society.

The Seoul Metropolitan Government said last week that it would push ahead with a plan to bar large discount store chains and super-super markets (SSMs) from selling around 50 kinds of daily goods that are often purchased at mom-and-pop stores and traditional markets.

These include cigarettes, garbage bags, ramyeon, makgeolli (Korea’s traditional rice wine) and small batteries. Soju, the most popular liquor in Korea, made the list but beer didn’t.

The initiative is part of the municipal government’s efforts to help protect small store operators that are increasingly losing to large retailers armed with quality goods and cheaper price tags. It is the second measure intended to protect small shops following a futile plan to limit large stores operating on weekends.

Earlier this year, the city government forced discount chains to close two Sundays per month in order to put the brakes on the expansion of big retailers. However, the restriction produced little because the discount stores won in a series of subsequent administrative lawsuits.

Backed by Seoul City Mayor Park Won-soon, reportedly a strong supporter of the move, the municipal government plans to submit a proposal to that effect to the Ministry of Knowledge Economy.

The proposal appears plausible, considering that small stores and traditional markets that provide a livelihood to many ordinary people are on the brink of extinction in the face of indiscriminate offensives from big retailers affiliated with large business conglomerates, known as chaebol here.

The logic is that big retailers focus on selling manufactured goods and other food and beverages, whereas small stores and traditional markets set their sights on the 50-odd selected items that are familiar to the ordinary people. The daily goods in question usually make up a small percentage of sales at those large discount chains.

Given the recent rationale of mutual prosperity and shared growth, the issue is quite convincing. The political community, which has less than four months before the presidential election, is expected to give an enthusiastic endorsement to Seoul City’s initiative.

However, the proposal, like the city’s foiled plan to limit large retailers’ weekend operation, may fizzle out due to its inherent problems. First of all, it is feared to inconvenience consumers to a large extent while failing to lift sales at mom-and-pop stores and traditional markets. Basically, big retailers argue that the move is in violation of the freedom of doing business and results in fewer choices for consumers.

In a nutshell, it is always consumers who pay dearly. What’s needed most is well-crafted prior consultations among the concerned parties so that consumers won’t be confused. <The Korea Times>

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