"We need to spread win-win models across the industry, such as the swift increases in supply prices by LG H&H."
Minister Han Seong-sook of the Ministry of SMEs and Startups visited LG H&H on the 14th and emphasized overcoming the crisis through win-win cooperation with partners amid the fallout from the Middle East war.
As raw material prices surged due to the Middle East war, LG H&H has raised supply prices for 15 partner companies and 59 contracts so far, totaling about 2.6 billion won. Starting in April, it plans to sequentially push price increases for 47 partner companies and more than 16,000 contracts within the year, up to a maximum of 20 billion won.
In particular, LG H&H is actively working to ease the burden on partners by promptly increasing payments even for contracts not subject to the supply-price indexation system.
At the event, representatives from partner companies, the Korea Federation of Small and Medium Enterprises, the Foundation for Large, Small and Medium Enterprise and Agricultural and Fishery Cooperation, as well as officials from the Ministry of SMEs and Startups (MSS) and the Ministry of Trade, Industry and Energy attended, along with the Korea Food Industry Association. The Korea Food Industry Association said it would work to spread win-win models like the LG H&H case across the entire food industry. It also requested the government to prepare practical policies to support small and mid-size food companies struggling due to the Middle East war's impact.
During the subsequent roundtable, representatives of partner companies raised management difficulties and suggested improvements. One partner company representative said, "Although the supply-price indexation system has been introduced, small and mid-size companies that still lack bargaining power find it hard to speak up," urging an active government role. Another partner company representative said, "Given the sharp surge in raw material prices, without swift price adjustments we would have considered halting operations," stressing the need to spread a culture of mutual growth.
Minister Han Seong-sook said, "The win-win activities demonstrated by LG H&H are an important asset that boosts the resilience of our economy," adding, "Based on the views raised on site, we will swiftly push policies to expand the supply-price indexation system and respond to the Middle East–driven supply chain crisis."
The Ministry of SMEs and Startups (MSS) plans to encourage the spread of win-win practices through incentives such as reflecting the Shared Growth Index evaluation, giving preference in awards to companies excelling in supply-price indexation, and exempting regular inspections of subcontracting practices.