Tofu Manufacturing Industry Re-designated as a 'Livelihood-Compatible Industry'

Regulations Apply to Large Products Over 1kg by Major Corporations for Five Years
Reduced Shipment Allowance for Major Corporations
Unlimited Allowance for OEM Supplied by Small Business Owners

The tofu manufacturing industry has been re-designated as a livelihood-type suitable industry. The Ministry of SMEs and Startups announced on the 26th that the Livelihood-Type Suitable Industry Deliberation Committee, composed of private members, held a meeting and made this decision.

The livelihood-type suitable industry system was established under the "Special Act on the Designation of Livelihood-Type Suitable Industries for Small Business Owners" enacted in 2018, aiming to guarantee the survival rights of small-scale small business owners. Large corporations, etc., are in principle prohibited from acquiring, starting, or expanding businesses related to livelihood-type suitable industries for five years.

The tofu manufacturing industry has a high proportion of small business owners and increasing fragility, and was designated as a livelihood-type suitable industry since 2020. The designation period expired at the end of last year. Although the domestic tofu industry has continued to grow, small business owners have been experiencing overall difficulties as the number of businesses, employment, and market share have decreased, which is the reason for this re-designation.

Based on recent market changes and opinions from various sectors, the committee decided to restrict the expansion of large corporations while improving detailed regulatory methods to ensure the effectiveness of protecting small business owners. Accordingly, the regulation targets were limited to large-capacity products exceeding 1 kg, which are mainly operated by small business owners. Tofu made from domestically produced soybeans is excluded from regulation regardless of capacity.

Additionally, the committee shared the view that to ensure the effectiveness of protecting small business owners, it is necessary to adjust the allowable shipment volume of regulated products by large corporations to a level lower than the tofu market growth rate, and resolved to allow only up to 105% of the maximum annual shipment volume in the past five years. However, unlimited allowance will be granted for orderer brand label manufacturing (OEM) volumes supplied by large corporations from small business owners.

Kim Woo-sun, Director of the Win-Win Cooperation Policy at the Ministry of SMEs and Startups, said, “Given the significant difficulties faced by small business owners who mainly supply to restaurants due to the recent economic downturn, we respect the committee’s decision,” and added, “Furthermore, since the tofu industry is growing unlike other suitable industries, we plan to consider support policies to enhance the competitiveness of small business owners separately from regulations on large corporations.”

The designation period for the tofu manufacturing industry as a livelihood-type suitable industry is five years, from the 1st of next month until February 28, 2030, and detailed information will be announced later.