The Democratic Party slightly eases regulations on large supermarkets... tightens rules on complex shopping malls

Bill Proposed to Allow Online Sales on Mandatory Closing Days
Legislation to Enforce Closure of Complex Shopping Malls Also Pushed
Distribution Industry Criticizes as 'Josammosa'

[Asia Economy Reporter Lim Chun-han] A bill allowing large supermarkets to operate online on mandatory closure days and easing regulations applied to corporate supermarkets (SSM) has been proposed by the Democratic Party of Korea. This is a measure to resolve fairness issues between online and offline businesses amid controversy over reverse discrimination. However, the distribution industry points out that since the Democratic Party is pushing legislation for mandatory closure of complex shopping malls, this move is seen as a 'change in form but not in substance.'

◆ Allowing online sales on mandatory closure days = According to the National Assembly Legislative Information System on the 22nd, Democratic Party lawmaker Ko Yong-jin officially proposed an amendment to the Distribution Industry Development Act on the 18th. The core of this bill is that large supermarkets and quasi-large stores conducting telecommunication sales under the "Act on Consumer Protection in Electronic Commerce, etc." will be excluded from mandatory closure and business hour restrictions. Lawmaker Lee Jong-bae of the People Power Party also proposed a bill last year to exempt large supermarkets and quasi-large stores from mandatory closure day restrictions when operating online shopping.

The online business of large supermarkets is centered around picking and packing (P.P) centers functioning as fulfillment centers located at key stores. Under current law, large supermarkets cannot process online orders on the two mandatory closure days per month. Lawmaker Ko stated, "Restricting online sales, which are already widespread in retail on mandatory closure days for large supermarkets, constitutes reverse discrimination that hinders fair competition and needs improvement."

Additionally, the bill includes provisions that only stores operated by companies running large-scale stores in the form of franchise chains, which bear more than 50% of the total costs including rent, construction, and equipment expenses for store openings, will be classified as quasi-large stores. If this clause is applied, small franchise stores such as Emart Everyday, Lotte Super, and GS Supermarket will be exempt from mandatory closure and store opening restriction regulations.

◆ Regulations on complex shopping malls remain unchanged = Originally, the Distribution Industry Development Act was expected to pass the National Assembly in the first half of this year, but due to negative public opinion among the 20s and 30s generations and industry opposition, the bill is currently stalled in the standing committee. The government and ruling party have been pushing for the bill's passage since early this year, but cautious voices gained weight ahead of the April 7 by-elections. This was a move to slow down, mindful of the votes of younger generations who prefer complex shopping malls. However, the Democratic Party's stance remains firm. At a closed-door party-government meeting of the National Assembly's Industry, Trade, Energy, Venture, and SMEs Committee held earlier this month, there were criticisms about the Distribution Industry Development Act not being included in the key bills to be processed in June.

The Democratic Party's representative bill is by lawmaker Hong Ik-pyo, which mandates local governments to restrict business hours and enforce mandatory closure for complex shopping malls such as Starfield and Lotte Mall. This expands the current law's restrictions on late-night operations and designation of two mandatory closure days per month for large supermarkets and SSMs to complex shopping malls. It also includes expanding traditional commercial preservation zones into commercial protection zones. If this bill passes, new store openings will effectively become difficult. Lawmaker Lee Dong-joo of the Democratic Party has proposed a bill to include complex shopping malls, department stores, duty-free shops, and specialty stores under business regulation targets.

This content was produced with the assistance of AI translation services.