New rules on bakery expansion postponed
Yoo Chang-hee, president of the Commission for Shared Growth for Large and Small Companies, announces a delay at the Seoul Palace Hotel in Seoul, Thursday, in the promulgation of regulations to prevent bakery franchises from further expanding domestically. / Yonhap
By Park Si-soo
The government has delayed the announcement of new regulations preventing bakery franchises’ further expansion in the domestic market.
The Commission for Shared Growth for Large and Small Companies said Thursday it will postpone the announcement by one month to ensure sufficient talks between bakery franchises and the government over the restrictions.
The delay sees major bakery chains relieved since the announcement of new restrictions that would deal a huge blow to their bottom line was initially scheduled for Thursday, while an association for small and independent bakeries denounced the decision.
“We have reached a conclusion that the two sides need more time to discuss the matter,” said commission Chairman Yoo Chang-hee. “A decision without sufficient talks among concerned parties would surely cause trouble.”
Yoo didn’t provide the exact date for the delayed announcement. Many industry insiders say the restrictions will take more than a month to agree on since the issue is too tricky to decide under the outgoing Lee Myung-bak administration.
They predict the timing for the decision will come under the Park Geun-hye government that will take office in February. They didn’t rule out the possibility of the restrictions being eased to a large extent under the Park presidency, whose top priority is rejuvenating the nation’s sagging economy.
The talks over the regulations started early this year amid mounting public anxiety over what critics called “reckless” expansion of big companies into segments ruled by mom-and-pop stores that have been cited as the key culprit behind the widening income gap between large and small companies.
President-elect Park is a vocal advocate for the restrictions, included as part of a push for “economic democratization.”
The commission has carried out extensive studies to apply the small business-friendly restrictions to dozens of other industries.