A local bakery (Image courtesy of Yonhap)
SEOUL, Aug. 7 (Korea Bizwire) – In a move to strike a balance between corporate expansion and small business protection, South Korea has announced changes to regulations governing bakery chains.
The new rules, set to take effect this month, will allow major bakery companies to open more stores while slightly relaxing distance restrictions from smaller, independent bakeries.
The Korea Commission for Corporate Partnership (KCCP) revealed on August 6 that it had brokered an agreement to extend the “win-win cooperation” pact between large bakery chains and small businesses.
The agreement, which follows the designation of bakeries as a sector suitable for small enterprises from 2013 to 2019, will now be extended for another five years until August 2029.
Under the new terms, large bakery chains will be permitted to increase their number of outlets by up to 5% of their existing stores annually, up from the previous cap of 2%.
Additionally, the minimum distance required between a new chain bakery and an existing small bakery will be reduced from 500 meters to 400 meters in metropolitan areas, while remaining at 500 meters elsewhere in the country.
The agreement was signed by the KCCP, the Korea Bakery Association, and five major companies including The Born Korea, Shinsegae Food, CJ Foodville, E-Land Eats, and Paris Croissant.
This marks a decrease from the nine companies that participated in the previous agreement, with most of the absentees having ceased operations.
Oh Young-Kyo, chairman of the KCCP, expressed gratitude towards the large companies and the Korea Bakery Association for their “mature attitude” in making this difficult decision.
He urged both sides to “respect each other’s business areas and further develop the baking culture based on their respective strengths.”
The bakery industry in South Korea has seen significant growth over the past decade, aligning with changing food trends.
The total number of bakeries more than doubled from 13,577 in 2012 to 28,070 in 2022. During the same period, the number of small bakery businesses increased from 10,198 to 22,216.
This growth is also reflected in the financial performance of small bakery businesses, with their total sales rising from 1.49 trillion won in 2012 to 2.21 trillion won in 2022.
Ashley Song (ashley@koreabizwire.com)
