"Delivery Unit Price Adjustment Consultation System, Small Businesses Avoid Applying... Needs Realistic Improvement"

Korea Federation of SMEs Holds 'Large-Medium Enterprise Supply Price Adjustment Committee' Meeting

[Asia Economy Reporter Kim Bo-kyung] The small and medium-sized enterprise (SME) sector has voiced the need for institutional measures to create an environment where fair prices are paid for delivery unit prices.

The Korea Federation of SMEs held the '2nd Large and Small-Medium Enterprise Delivery Unit Price Adjustment Committee' on the 15th at the Federation of SMEs in Yeouido, Seoul.

The committee, formed in response to the implementation of the delivery payment adjustment negotiation system through the Federation of SMEs since April, consists of a total of 15 members including representatives from seven industries and public interest commissioners to ensure efficient operation of the system.

The delivery payment adjustment negotiation system allows the entrusted company or cooperative (Federation of SMEs) to apply for and negotiate delivery payment adjustments with the entrusting company when changes in supply costs such as raw material prices require adjustment of delivery payments in consignment transactions.

Industry representatives attending the meeting pointed out that despite the sharp rise in raw material prices, SMEs hesitate to apply due to concerns over severing ties with large corporations, and they unanimously agreed on the need for proactive system improvements.

Chairman Han Byung-jun (Chairman of the Korea Information Industry Cooperative) mentioned the limitations of the current system, which requires SMEs to initiate applications before adjustment negotiations can proceed.

He said, "The system needs to be improved to grant collective bargaining rights, allowing cooperatives to directly apply for adjustments to large corporations even without SME applications when raw material prices rise sharply, thereby creating an environment where fair prices are paid for delivery unit prices."

Attorney Kim Nam-geun of Law Firm Wemin stated, "A transactional environment should be established where large and small-medium enterprises share the risk burden from raw material price fluctuations at a reasonable level."

He added, "It is urgent to establish institutional measures such as introducing a 'delivery unit price linkage' clause primarily in standard subcontract contracts in industries like shipbuilding and automotive, where contracts are typically renewed annually."

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