‘Tteokguk and Tteokbokki Rice Cakes, Banned for Large Corporations’... Designated as Livelihood-Suitable Industries for 5 Years

Large Corporations' OEM for Small Businesses 'Fully Allowed'
Opening Market Growth Opportunities through Win-Win Cooperation between Large and Small Enterprises

Asia Economy DB

[Asia Economy Reporter Kim Heeyoon] Large corporations will be prohibited from participating in the production of rice cake soup rice cakes (tteokguk tteok) and spicy rice cake rice cakes (tteokbokki tteok) for the next five years. The Ministry of SMEs and Startups announced on the 2nd that the Livelihood-Type Suitable Industry Deliberation Committee held a meeting and designated the "production of tteokguk tteok and tteokbokki tteok" as a livelihood-type suitable industry.

Previously, from 2014 to 2020, the Win-Win Growth Committee recommended the production of tteokguk tteok and tteokbokki tteok as an industry suitable for small and medium enterprises (SMEs). Through this, large corporations refrained from expanding production facilities and entering the market anew, instead utilizing OEM (Original Equipment Manufacturer) production for SMEs, achieving results in mutual growth.

However, after the recommendation period for SME-suitable industries expired and with the expansion of demand for Home Meal Replacement (HMR) products, the tteokguk and tteokbokki market has grown, and signs of business expansion by large corporations into the production of tteokguk tteok and tteokbokki tteok have continued. As a result, small business owners who have traditionally produced these rice cakes are complaining of worsening business conditions.

In particular, many small business owners are striving to seek new business opportunities through developing HMR products themselves and online sales, but there are growing concerns that if large corporations aggressively expand and dominate the market, small business owners will not even have a chance.

Accordingly, the Livelihood-Type Suitable Industry Deliberation Committee judged that it is necessary to regulate the business expansion of large corporations in the production of tteokguk tteok and tteokbokki tteok to protect small business owners and resolved to designate it as a livelihood-type suitable industry.

With this designation, from now until September 2026, large corporations will be restricted from acquiring, starting, or expanding businesses in the production of tteokguk tteok and tteokbokki tteok.

However, ways to further grow the market through cooperation between large and small-medium enterprises were also explored. First, if large corporations produce tteokguk tteok and tteokbokki tteok through OEM for SMEs, production and sales will not be restricted.

Additionally, to create new markets such as premium products, production and sales by large corporations are allowed up to 110% based on the maximum production and sales performance (shipment volume). Furthermore, considering the impact on domestic farmers, production and sales of items made from domestically grown rice and wheat will not be restricted.

Park Sangyong, Director of the Win-Win Cooperation Support Division at the Ministry of SMEs and Startups, said, "Through the designation of livelihood-type suitable industries, small business owners producing tteokguk tteok and tteokbokki tteok in the increasingly competitive food market will be able to operate their businesses more stably. It is meaningful in that it protects small business owners while enabling large and small enterprises to expand the market and achieve mutual growth through cooperation."

The livelihood-type suitable industry system was introduced to protect fields where many small business owners operate in small-scale business forms due to low entry barriers. Starting with the bookstore industry in 2019, a total of 11 industries have been designated, including the production of tteokguk tteok and tteokbokki tteok. The designated industries include bookstores, LPG retail, vending machine operation, production of four types of fermented sauces (soy sauce, red pepper paste, soybean paste, cheonggukjang), tofu production, production of two types of noodles (guksu and naengmyeon), and production of tteokguk tteok and tteokbokki tteok.

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