By Yoon Ja-young
The implementation of the anti-graft law last September directly hit restaurants, with many of them reporting over 25 percent decrease in total sales or number of customers. Their outlook for this year is also pessimistic.
According to a survey by the agriculture ministry on around 3,000 restaurants, the total sales index of restaurants stood at 74.27. The index is based on how the respondents think their total sales have changed following the implementation of the anti-graft law. The index thus indicates that restaurants saw a 25.73 percent drop in total sales, on average.
The number of customers index, meanwhile, recorded 74.29, which means they saw on average a 25.71 percent decrease in customers.
The so-called Kim Young-ran Act, named after the former head of the Anti-Corruption Civil Rights Commission who proposed the law, bans public servants, teachers and journalists from receiving meals valued over 30,000 won, gifts worth more than 50,000 won and congratulatory and condolence money in excess of 100,000 won.
While the law is expected to enhance transparency of the society, there have been complaints among affected industries and sectors. Flower businesses, for instance, reported a 28 percent drop in retail sales following implementation of the law. It had been customary to send orchids or flowers to congratulate business partners on a promotion, or to send huge flower easels to weddings or funerals, but such demand has plunged on fear over the law. Demand on hanwoo, or Korean beef, as well as quality fruits, which were popular gift items during holiday seasons, also dropped sharply.
The survey showed the restaurants’ pessimistic outlook for the first quarter as well. Their sales outlook index stood at 74.27, while the number of customers outlook index recorded 74.29.
The agriculture ministry pointed out that the anti-graft law is not the only negative factor influencing restaurant businesses. “On top of the contraction of consumer sentiment following political uncertainties, the anti-graft law as well as avian influenza which led to soaring egg prices are negatively affecting the restaurants,” an official at the ministry said.
As a result, restaurants are slashing number of employees. Statistics by the labor ministry showed that the number of people working in the restaurant industry dropped by 30,000 from a year ago following the implementation of the act.