By Lee Hyo-sik
Korea’s family-controlled conglomerates should be stopped from monopolizing duty free stores here, and instead compete with multinational companies overseas, says the head of the national export promotion body.
Korea International Trade Association (KITA), Chairman Kim In-ho also says the government should liberalize the duty free industry so anyone seeking to set up shop could do so.
“Korea’s large business groups shouldn’t compete with one another to open duty free shops here,” Kim told reporters on Friday. "They must not get themselves involved in any area of business which the government controls. They should not be able to make such easy money on the domestic market.”
The chairman urged large Korean companies to do more to find business opportunities overseas, rather than remain complacent with their status quo in the domestic.
“Businesses should be judged by the market, not by the government ― they cannot just rely on government-issued licenses for survival,” he said.
Kim called on the government to liberalize the duty free market so that anyone wishing to sell tax-free items could do so.
“The current system under which the government issues a license to duty free store operators every five years should be reconsidered,” he said. "The government cannot replace the market. The market, not policymakers, should decide who dies and who survives.
"The government needs to abolish the license system and let anyone open duty free shops," Kim said.
His remarks are seen as criticism of Lotte, SK, Doosan, Shinsegae and other family-controlled conglomerates that did everything they could to win the five-year state licenses to operate duty free shops, the “golden goose” of the retail industry.
SK and Lotte, which failed to renew their licenses this month, are grappling with the aftershock because they have to dismiss thousands of workers and deal with leftover stock worth tens of billions of won.
Doosan and Shinsegae, which secured the much-coveted right to run their first duty free stores in the capital, are also worried that their licenses could be taken away in five years.
Some lawmakers and businesspeople believe the government should extend the licensing period for duty free stores to 10 years, saying this would strengthen competitiveness in this growing sector.
Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.