Relaxation of Large Bakery Chain Quota to 5% and Distance Restriction to 400m in Seoul Metropolitan Area
Total Number of Bakeries and Sales Doubled Over 11 Years
The 'Bakery Industry Win-Win Agreement,' which restricts large corporations from opening bakery stores, has been extended for five years. The Born Korea (Baekdabang Bread Research Institute), which had previously been exempt from regulation, will now participate in the agreement and be subject to opening restrictions.
A customer is selecting bread displayed at a bakery. Photo by Asia Economy DB
The Korea Commission for Corporate Partnership explained the key points of the win-win agreement, stating that the number of new store openings allowed has increased from the previous 2% to 5%, the distance restriction from existing small bakeries in the metropolitan area has been reduced from 500m to 400m (while the 500m restriction remains in areas outside the metropolitan region), and that Born Korea’s Baekdabang Bread Research Institute, which operates 18 stores nationwide, will also be regulated.
The Commission announced that with the completion of the agreement to extend the win-win pact between large and small-medium enterprises in the bakery industry, a 'Bakery Industry Large and Small-Medium Enterprise Win-Win Agreement Ceremony' will be held at 2 p.m. on the 6th at the Royal Hotel (Jung-gu, Seoul).
The ceremony will be attended by Oh Young-gyo, Chairman of the Commission for Corporate Partnership; Ma Ok-cheon, President of the Korea Bakery Association; Kim Seong-han, CEO of Paris Croissant; Kim Chan-ho, CEO of CJ Foodville; and Choi Kyung-sun, Executive Director of Born Korea, among others, to reaffirm their commitment to cooperative growth in the bakery industry.
Following the designation of the bakery industry as a small-medium enterprise suitable sector, the win-win agreement, concluded through private consensus since 2019, has significantly influenced both the quantitative and qualitative growth of the domestic bakery industry.
According to the Commission’s survey, the number of bakery businesses has doubled in line with changes in dietary trends, and there has been a positive effect on improving sales for micro small business owners with fewer than five employees.
The total number of bakery businesses increased from 13,577 in 2012 to 21,470 in 2019, and 28,070 in 2022, more than doubling. The number of small bakery businesses also rose from 10,198 in 2012 to 15,822 in 2019, and 22,216 in 2022, more than doubling as well.
As a result, total sales in the bakery industry grew from KRW 3,612.611 billion in 2012 to KRW 5,977.512 billion in 2019, and KRW 7,570.524 billion in 2022. Sales by small bakery businesses increased from KRW 1,493.659 billion in 2012 to KRW 2,051.352 billion in 2019, and KRW 3,212.146 billion in 2022.
With the rise of unique small bakeries catering to changing consumer preferences, local cultures such as 'bread pilgrimages'?visiting famous local bakeries?have spread. Large corporations, leveraging excellent baking technology and systematic store management, have led overseas expansion, sparking a global K-Bakery craze.
For example, the number of Tous Les Jours overseas stores increased 6.7 times from 66 in 2012 to 443 last year, and Paris Baguette’s overseas stores grew 3.9 times from 137 in 2012 to 544 last year.
The Commission conducted a survey from the second half of last year to review the extension of the agreement, and through a total of 16 individual and group consultations up to recently, coordinated the opinions of the parties involved to reach a final agreement.
The Korea Bakery Association, considering the continued need to protect small business owners despite the growth of neighborhood bakeries during the suitable sector and win-win agreement periods, agreed on a grand scale to gradually ease the existing total volume and distance restrictions.
In particular, major parties such as Paris Croissant and CJ Foodville shared the value of coexistence with neighborhood bakeries during the consultation period and agreed on extending the agreement. Born Korea (Baekdabang Bread Research Institute), which had voluntarily and faithfully complied with the bakery industry win-win agreement even before this pact, newly joined this agreement, adding meaning to the cooperation between large and small-medium enterprises.
Oh Young-gyo, Chairman of the Commission for Corporate Partnership, said, "I deeply appreciate the mature attitude of large corporations and the Korea Bakery Association for making a difficult decision from the perspective of win-win cooperation. Through this win-win agreement, I ask that you respect each other’s business areas and, based on your respective strengths, further develop Korea’s baking culture beyond what it has been."
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