'Gapjil' and 'Sanjae'... Distribution Business Leaders Summoned One After Another to the National Assembly Audit Session

Next Month's National Audit from 10 to 27
‘Serious Accident’ Shani and Costco Summoned
Controversy Over Tanghulu Sugar Overconsumption
Jamboree and Franchise Store Power Abuse Controversy Under Scrutiny

The distribution industry is on edge ahead of the national audit. This is due to the possibility that executives of major companies will be summoned as witnesses in connection with various allegations of ‘gapjil’ (abuse of power), ‘unfair trade practices,’ as well as health issues and industrial accident problems.

National Assembly Building. Photo by Asia Economy DB

According to political circles and the distribution industry on the 26th, the National Assembly’s Environment and Labor Committee held a plenary meeting on the same day and finalized the list of witnesses and reference persons for the Ministry of Employment and Labor audit scheduled for the 12th of next month, including Lee Kang-seop, CEO of Shani, and Cho Min-su, CEO of Costco Korea.

CEO Lee was summoned to the audit due to the occurrence of serious industrial accidents related to consecutive factory worker entrapment deaths, and CEO Cho was called to the National Assembly for insufficient measures against serious industrial accidents at mart workplaces, including employee deaths caused by heatwaves.

However, opposition members of the Environment and Labor Committee are protesting that the actual responsible parties of large corporations, such as the chairman and founders, should appear at the audit. Therefore, depending on negotiations between ruling and opposition party secretaries, there remains a possibility that Heo Young-in, chairman of SPC Group, will be added to the witness list by next month.

The National Assembly’s Political Affairs Committee is expected to summon the management of Twosome Place as witnesses at the audit of the Fair Trade Commission scheduled for the 16th of next month, to question the controversy over the headquarters’ excessive logistics margin profiteering claimed by franchise owners.

Currently, the National Franchise Owners Association states, “Twosome Place headquarters demands excessive differential franchise fees, causing many stores to operate at a net loss,” and plans to report the headquarters to the Fair Trade Commission for unfair practices within this week.

The Political Affairs Committee is also reportedly considering summoning Kwak Geun-yeop, CEO of Adidas Korea, as a witness amid allegations of ‘gapjil’ such as unilateral contract termination and forced product pushing against franchise owners. Earlier, on the 7th of this month, the Adidas National Franchise Owners Association presented damage cases at a meeting co-hosted by the Democratic Party’s Euljiro Committee and requested that Adidas Korea be summoned as a witness at this year’s audit.

Earlier, the National Assembly’s Industry, Trade, Energy, Small and Medium Business Committee held a plenary meeting on the 25th and finalized the list of witnesses and reference persons for the audit, including Kim Ho-yeon, chairman of Binggrae. The committee plans to summon Chairman Kim to check the status of win-win cooperation between partner companies and small and medium-sized merchants, as well as communication with nearby local governments.

The National Assembly’s Health and Welfare Committee recently decided at a plenary meeting on the 21st to summon Kim So-hyang, CEO of the franchise brand ‘Wangga Tanghulu,’ which has gained great popularity mainly among people in their teens and twenties due to its colorful appearance and sweet taste. The committee plans to question CEO Kim regarding the issue of excessive sugar consumption among adolescents.

The National Assembly’s Gender and Family Committee is reviewing witness applications from GS Retail and Ourhome regarding the jamboree disruption incident. Since the Ministry of Gender Equality and Family is the relevant department and the main ministry for the jamboree, the committee is expected to examine GS25’s jamboree overcharging controversy and Ourhome’s ‘moldy egg’ issue.

Amid growing controversy over the abolition of mandatory closures for large supermarkets, there are also suggestions that representatives of large supermarkets may appear at the national audit.