The tax agency’s revocation of its original stance is seen as a way of admitting that controlling prices for a variety of retail distribution channels is in fact difficult. (Yonhap)
SEOUL, Aug. 29 (Korea Bizwire) — The National Tax Service has decided to rescind a controversial policy requiring suppliers to unify the price of liquor regardless of the amount of liquor they are supplying to various vendors, taking a step back from its original stance.
The tax agency announced on Wednesday that it will implement a new amended policy that focuses on rebate bans by no later than mid-October.
In the second draft of the amendment, which is most likely to be the final version, the tax agency has taken out the provision requiring suppliers to unify the price of liquor regardless of the amount of supply.
In the previous version of the draft, the tax agency had included restrictions that ignored the amount of sales among wholesale and retail stores, and required them to supply liquor at a unified price.
All retail sales, for instance, are required to supply liquor at the same price, regardless of the destination–whether it be a large discount retailer or a small convenience store.
The provision was met by strong opposition, however, as suppliers argued that it disregarded the reality of price differences even among the same convenience stores, claiming that it was an excessive move to control over pricing that infringes upon the principle of market competition.
The second draft that followed took a step back from previous proposition and allowed different pricing for vendors that sell 100 bottles and those that sell 10,000 bottles of liquor each month, based on one condition to document all the decisions and basis for the differentiated pricing
The tax agency’s revocation of its original stance is seen as a way of admitting that controlling prices for a variety of retail distribution channels is in fact difficult.
The agency, however, decided to maintain the provisions related to prohibiting financial support given to startups by wholesale companies.
H. M. Kang (hmkang@koreabizwire.com)
