[Reverse Discrimination Caused by Regulation] Ruling and Opposition Speed Up Distribution Regulations... Watching Constituencies

Expansion of Scope, Discussion Needed for Foreign Companies

[Asia Economy Reporter Lim Chun-han] The political sphere is accelerating discussions on distribution regulations, such as mandatory closures of complex shopping malls, to protect traditional markets and neighborhood businesses. However, there are concerns that the Distribution Industry Development Act acts as a shackle for domestic companies while having little effect on foreign companies, leading to issues of reverse discrimination.

A Democratic Party official said in a phone interview with Asia Economy on the 9th, "(Distribution regulations) are less a matter of ruling and opposition parties and more about lawmakers’ positions depending on their constituencies," adding, "(The ruling party’s) basic stance is to include complex shopping malls in the mandatory closure targets. Issues such as whether foreign companies are exempt from regulations need to be discussed in the subcommittee." While both ruling and opposition parties focus on regulating domestic companies citing their constituencies, foreign companies like Costco are ignoring laws and regulations and pushing ahead with store openings.

The Democratic Party reached a consensus this month on processing the Distribution Industry Development Act. Hong Ik-pyo, the Democratic Party’s Policy Committee Chair, proposed a plan allowing local government heads to restrict operating hours and enforce mandatory closures for complex shopping malls such as Starfield and Lotte Mall. Under the current law, restrictions on late-night operations and designation of two mandatory closure days per month apply to large supermarkets and corporate-style supermarkets (SSM); the proposal expands these regulations to complex shopping malls. It also includes expanding traditional commercial preservation zones into commercial protection zones. If this bill passes, it will effectively become difficult to open new stores.

Democratic Party lawmaker Lee Dong-joo has proposed a bill to include complex shopping malls, department stores, duty-free shops, and specialty stores under operating regulations. However, even within the ruling party, there is a view that further discussion is needed on the extent of regulation targets.

The People Power Party is not opposed to distribution regulations themselves. Lawmaker Choi Seung-jae of the People Power Party has submitted a bill that includes mandatory closures for food material marts.