Foreign food chains under fire

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Foreign food chains under fire

The National Commission for Corporate Partnership (NCCP) designated 14 service industries, including bakeries and restaurants and two manufacturing businesses, as areas reserved for small enterprises.

Last Monday, it finalized the discussions regarding regulations of large corporations and midsized restaurant operators to only open new stores within 100 meters (328 feet) of subway stations and 200 meters of stations in nonmetropolitan areas to protect small restaurants.

Criticism of large and midsized restaurant operators has grown that the decision by the NCCP only benefits large foreign food companies and kills the local restaurant businesses.

The Korea Fast Food Store Association said yesterday it is planning to submit an application to the NCCP to also include the fast food restaurant industry to be considered as small and medium enterprises.

“We have been thoroughly reviewing the plan and decided that we meet the NCCP officials next week to discuss the issue,” said Kim Soo-bok, director of the planning bureau at the association.

“We assume that we will submit an official application in August and when the NCCP works on the fast food restaurant industry, regulations will be imposed on large foreign coffeehouse chains such as Starbucks and other fast food chains like Burger King and McDonald’s.”

Not only the foreign franchise companies, but also local chains such as Lotteria, Mr. Pizza, Angel-in-Us and Caffe Bene would be included in the new regulation. The Korea Fast Food Store Association is a coalition of 40,000 fast food stores selling fried chicken, hamburger and pizza, snack bars selling gimbab and noodles, and small vendors that sell tea or ice cream.

As the association is registered by the government as the representative organization for the pizza, hamburger and coffee store business sector, it is eligible to apply to the industry sector as suitable for small enterprises.

Although the Fair Trade Commission is limiting the opening of franchise stores, the effect has not been significant, as foreign companies such as Starbucks have been excluded from the limitations. The FTC forbids large local coffeehouse chains from opening new stores within 500 meters of existing coffee shops.

“In recent years, large franchise companies such as Starbucks and Caffe Bene have aggressively expanded their stores. In the case of Starbucks, it opened 100 new stores last year,” said another official from the fast food association.

By Kim Jung-yoon [kjy@joongang.co.kr]

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