Korea Disease Control Association Appeals to SK Group... "Unfair Entry of Large Corporations into Small Markets"

Busan International Film Festival Theater Disinfection
(Busan=Yonhap News) Reporter Kang Minji = On the afternoon of the 9th, disinfection personnel for the Busan International Film Festival (BIFF) are disinfecting the main theater at the Busan Cinema Center in Haeundae-gu, Busan. 2021.10.9
mjkang@yna.co.kr
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[Asia Economy Reporter Junhyung Lee] Small and medium-sized disinfection companies have called for a halt to large corporations entering the market.

The Korea Disinfection Association's Large Corporation Market Entry Countermeasures Committee announced on the 18th that it visited the SK Group headquarters and delivered an appeal urging the suspension of large corporations' entry into the disinfection market to SK Chairman Chey Tae-won, SK Telecom President Park Jung-ho, and others.

This appeal was drafted by the Korea Disinfection Association after forming the Countermeasures Committee and gathering member opinions in response to recent large corporations entering the disinfection market. The committee stated in the appeal, "SK Group publicly promotes itself as an ESG (Environmental, Social, and Governance) model company emphasizing fairness and coexistence," but "in reality, through its subsidiary ADT Caps, it is threatening the livelihoods of existing disinfection companies and engaging in unfair competition."

Previously, the Korea Disinfection Association pointed out ADT Caps' market entry last year. In December of last year, ADT Caps entered the domestic disinfection market by partnering with a foreign disinfection company. At that time, the industry expressed concerns about ADT Caps' market entry through the Korea Disinfection Association. Recently, SK Group announced plans to conduct disinfection business targeting approximately 140 affiliated companies within the group.

The current domestic disinfection market size is about 1 trillion KRW. According to the Korea Disinfection Association, most disinfection companies are small businesses with annual sales under 100 million KRW. The number of disinfection companies nationwide surged from about 4,000 before COVID-19 to approximately 10,000 recently. The committee explained that many small business owners from other industries entered the market due to COVID-19.

The Korea Disinfection Association's Countermeasures Committee claimed, "This is a typical case of large corporations funneling work to themselves." They added, "SK is conducting indiscriminate business beyond its own customers by utilizing the infrastructure of affiliates such as SK Telecom and has partnered with about 30 disinfection companies under the pretext of 'coexistence,' collecting approximately 30% in kickbacks, thereby pushing small disinfection operators into crises of unfair competition and becoming subcontractors."

Furthermore, the committee questioned, "Should SK Group, a top-tier company with annual sales exceeding 134 trillion KRW, enter the disinfection market and threaten the livelihoods and ecosystem of small business owners?" They urged, "Large corporations should stop free-riding on the disinfection market and instead support large-scale projects such as vaccine, treatment, and diagnostic kit development that can be undertaken with their capital and infrastructure."

Lee Cheol, Vice Chairman of the Korea Disinfection Association and head of the Countermeasures Committee, stated, "Most disinfection companies are small businesses with annual sales under 100 million KRW, and the reckless entry of large corporations threatens the livelihoods of about one million disinfection workers and their families." He added, "We urge the cessation of indiscriminate entry by large corporations so that disinfection companies, which work on the front lines with professionalism and pride, can be protected and nurtured as a specialized industry."

Meanwhile, the Korea Disinfection Association's Countermeasures Committee plans to deliver appeals not only to SK Group but also to Shin Dong-bin, Chairman of Lotte Group; Huh Chang-soo, Honorary Chairman of GS Group and former Chairman of the Federation of Korean Industries; and Huh Tae-soo, Chairman of GS Group.