Complaint from retail chains rejected
By Kim Rahn
A court rejected Friday a complaint filed by six retail outlets to invalidate the government’s recent measure to close their stores and other large-sized supermarkets for two Sundays a month.
The ruling by the Seoul Administrative Court is expected to accelerate the government’s steps designed to boost businesses at smaller mom-and-pop stores and traditional markets that have lost customers to discount outlets and the so-called super supermarkets(SSMs).
The court rejected the complaint filed on April 6 against Gangdong and Songpa ward offices in Seoul, which set up their own ordinances to initiate the compulsory closure. The six retail giants claimed the ordinances infringed on their rights to do business and the conditions of fair competition guaranteed by the Constitution.
“It is true that the discount stores will incur losses as a result but the losses can be recovered considerably by taking other measures. So, it is unlikely for the mandatory shutdown to hugely damage their overall business,” judge Oh Seok-jun said.
The court said the measure by ward offices is based on the law on the distribution industry, which was revised to protect small-sized companies and traditional markets. Competition with discount stores or SSMs has swallowed them up.
“If we keep allowing discount chains to expand, the situation will get worse for smaller stores,” Oh said.
We reject the demand to ensure co-development of large-sized and small-sized distribution companies,” Oh said.
Under the ordinance, Gangdong and Songpa force discount chains and SSMs to close on every second and fourth Sundays and between midnight and 8 a.m. every day. Seven discount stores and 48 SSMs in the two districts are subject to the ordinance.
The court’s ruling is expected to have an influence on similar cases in other local authorities of Bupyeong in Incheon, and Suwon and Seongnam in Gyeonggi Province.
The retail companies plan to appeal. They insist the ruling ignored how customers are inconvenienced and the principle of fair competition.