South Korea’s conglomerates and small and mid-sized wholesalers are battling in the country’s 40 trillion won ($37.7 billion) wholesale food product market

November 24, 2013 Leave a comment

SMBs, conglomerates clash in $38bn wholesale food product market

Seo Chan-dong, Kim Tae-sung

2013.11.22 16:53:56

South Korea’s conglomerates and small and mid-sized wholesalers are battling in the country’s 40 trillion won ($37.7 billion) wholesale food product market. The national retailer association submitted petition to National Commission for Corporate Partnership (NCCP) Thursday to legally categorize the wholesale food product sector as industry suitable for small and mid-sized businesses (SMBs), arguing conglomerates that supply food products are increasingly hurting SMBs, said sources in the relevant sector Friday. The association had collected cases of damage to SMBs in Incheon and sent the petition to NCCP in September, but the national commission said the petition requires nationwide cases. Therefore, the association re-submitted the petition for the second time.
“This time the petition contains cases of damage to small and mid-sized retailers across the nation, including Ulsan, Jinju, Gwangju and Busan, so the NCCP would accept it,” said Park Byung-gyu, executive director of the Incheon wholesaler association who led the effort to file for the petition.
The petition lists eight large food product suppliers: CJ Freshway, Our Home, Samsung Everland’s Welstory, Shinsegae Food, Daesang Bestco, Dongwon Home Food, Hyundai Green Food and Cooperative Marketing.
One of them is acquiring small and mid-sized wholesalers in areas where the company finds it hard to open new stores, according to the petition. Another company offered to supply food products at lower prices to mom-and-pop supermarkets and restaurants in neighborhoods, which receive food products from SMBs, and urged them to terminate contracts with the SMBs.
In response, conglomerates claim large companies need to participate in the market to ensure transparency in the food product market and protect consumers’ rights.

Filed under Macro Trends

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