The Yoon Suk-yeol administration's distribution industry policy has come to a sudden halt. President Yoon, who took office in 2022, identified the easing of regulations on large retailers as one of the regulatory reform tasks. The focus is on relaxing regulations on mandatory closure days for large retailers. However, the government's policy to ease regulations on the distribution industry, which has been a focus amidst the impeachment crisis Yoon has initiated, is losing momentum.

In this situation, the opposition party is moving to strengthen the regulation on mandatory closure days for large retailers. The distribution industry is keenly aware of the potential changes in related regulations.

Graphic=Jeong Seo-hee

According to the National Assembly's legislative information system on the 19th, there are a total of nine bills concerning mandatory closure days for large retailers included in the 'Distribution Industry Development Act amendment.' Among these, three bills proposed by the opposition party focus on strengthening regulations on mandatory closure days for large retailers.

The amendment proposed by Representative Jeong Hye-kyung of the Progressive Party includes expanding regulations not only on large retailers but also on department stores, duty-free shops, and complex shopping malls. The intent is to strengthen protections for small business owners by including department stores and duty-free shops, which were not under regulation, and to restore workers' rights to rest and health, which have been infringed due to holiday work.

Representative Song Jae-bong of the Democratic Party proposed a bill to prevent mandatory closure days for large retailers from being designated on weekdays. This means that even changing mandatory closure days for large retailers to weekdays, based on local government ordinances with consultation from stakeholders, would be prohibited. Currently, large retailers located in Daegu, as well as in the Seocho and Jung districts of Seoul, are closing on weekdays instead of Sundays. If this bill passes the plenary session, closure on weekdays will become impossible in the future.

Representative Kim Dong-a of the Democratic Party proposed an amendment suggesting that instead of imposing restrictions on operating hours or mandatory closure days after establishing large retailers, the location of the establishment should be reviewed beforehand to limit registration.

A notice for mandatory closure is posted at a large supermarket in downtown Seoul. On Jan. 22, the government announces that it promotes the amendment of the Distribution Industry Act to abolish the mandatory holiday closure regulation applicable to large supermarkets and to allow online delivery during restricted operating hours during the ‘Discussion Meeting on People’s Livelihood with the Public.’ However, the government’s efforts to ease the mandatory holiday closure regulation for large supermarkets lose momentum due to the impeachment situation. /Courtesy of News1

Earlier this year, the government held a public discussion to push for easing regulations, including abolishing mandatory holiday closure for large retailers and lifting the ban on early morning delivery. Members of the ruling party also initiated proposals to amend the Distribution Industry Development Act in support of this. The core content of the six proposed amendments is to ease regulations on mandatory closure days during public holidays for large retailers.

The government's and ruling party's active encouragement of abolishing and autonomously changing mandatory closure days for large retailers stems from growing skepticism about the effectiveness of the Distribution Industry Development Act, enacted in 2012. The expected effect of revitalizing traditional markets and local businesses near large retailers has been minimal.

According to the Ministry of Trade, Industry and Energy, the online share of total retail channel sales surged from 28.4% in 2015 to 50.5% last year, while the share of large retailers dropped from 27.8% to 12.7% over the same period.

The distribution industry is concerned that the government's and ruling party's policies may be rendered null due to the impeachment crisis. An industry official noted, "I was worried that unexpected impacts from the impeachment crisis would affect year-end sales, but even the anticipated easing of mandatory closure regulations has become uncertain. The entire industry is on edge."

Another official stated, "Policies pushed by the current government have effectively come to a standstill due to the impeachment crisis, and if this situation persists, strengthening regulations on mandatory closure days seems inevitable."