In addition, the Democratic Party decided to deal with an amendment to the Distribution Industry Development Act that applies the’twice a month business limit’ to complex shopping malls such as Starfield and Lotte Mall at an extraordinary assembly in February. In the plenary session of the National Assembly on the 8th, the government decided to reinforce the business regulations in the distribution industry following the handling of the severe disaster corporate punishment law.
A key Democratic Party official said in a call with the Korea Economic Daily on the 6th that “there is a plan to deal with the amendment to the Distribution Industry Development Act at an extraordinary National Assembly in February.” The Democratic Party will discuss the bill initiated by Democratic Party Congressman Hong Ik-pyo in July last year, but plans to harmonize some of the contents after deliberation on the bill by the Small and Medium Venture Business Committee of the National Assembly.
Congressman Hong’s bill requires that complex shopping malls such as Starfield and Lotte Mall are subject to restrictions on business restrictions like hypermarkets, and include shopping streets such as alleys in the’traditional commercial preservation zone’ that restricts registration of large-scale stores. In addition, by removing the expiration date of the existing hypermarket regulations such as E-Mart until November 2025, the related regulations were permanently applied. When this provision was newly established in 2015, the regulatory duration was set as November 2020, but when the sunset deadline arrived last year, the National Assembly extended it for five years.
The related distribution industry is greatly embarrassed when the Democratic Party has pushed forward with the revision of the Distribution Industry Development Act in a situation where the online market expansion and the new coronavirus infection (Corona 19) were overlapped. Experts pointed out that the ruling party is trying to enforce a revision of the law even though reinforcing regulations on shopping malls has little effect on the business of small businesses.
“If you take two days off on weekends, one-third of monthly sales will fly”… Appeal to the edge of the distribution industry
Corona and online pincers moribund… Damage to small business owners in shopping malls also increases
Distribution companies that operate complex shopping malls are opposing the politics’ movement to introduce a mandatory holiday system. It is claimed that it is driving a complex shopping mall that faces multiple adverse events such as the Corona 19 incident and online shopping mall air raids to the edge of the cliff.
The industry predicts that the weekend mandatory holiday system will be a direct hit in the business. This is because most of the complex shopping malls are located in the suburbs and visitors are crowded on weekends. An official from the distribution industry said, “If the number of visitors to the department store on weekends is twice as large as on weekdays, then the complex shopping mall is five times,” and said, “If you take two days off during the weekend, one-third of sales per month will disappear.” For this reason, small and medium-sized merchants who entered Starfield COEX Mall in September of last year gave a letter of opinion to Democratic Party lawmaker Song Gap-seok, “Please do not introduce compulsory weekend closure of complex shopping malls.”
The industry was dissatisfied with the politics of not listening to the voice of the market. An official from a retailer said, “We have never held a public hearing while making amendments to the law,” and said, “It is not easy to express opinions at the level of the association as the passport is pushed forward.” Through the New Year’s speech, there are also many criticisms that it goes against the promise of Democratic Party President Lee Nak-yeon, who said, “I will help companies and make a new leap forward in the economy.”
Seo Yong-gu, a professor of business administration at Sookmyung Women’s University, pointed out, “If you restrict the business of a shopping mall, customers will not be crowded into the traditional market,” he said. Starfield stores 60-70% of all stores, and Lotte Mall Suji stores 70%.
Cho Dong-geun, an emeritus professor at the Department of Economics at Myongji University, pointed out that it is inappropriate to delete the regulation expiration date. He said, “Even if the sunset system introduces regulations, it is the purpose of carefully checking the effectiveness of the policy whenever the duration of its duration arrives,” he said. “Once the regulation is permanently included in the legislation, it is not easy to amend even if problems arise afterward.” .
Inside the Democratic Party, there are concerns that the bill could run counter to the purpose of protecting small businesses. An official from the Democratic Party’s Policy Committee said, “In a large framework, it is correct to include a complex mall as a subject of regulation, but convenience facilities in complex malls, duty-free shops, and terminals operated by mid-sized companies will be excluded from the regulation.” “I will try to minimize the subject of regulation.” The official added, “Some stores specified by the local government’s ordinance can be excluded from the regulation.”
Reporter Kim So-hyun/No Yoo-jeong [email protected]