Merchants federation targets misleading signs

Small distribution stores of large discount chains will be banned from putting up signs that mentions the chains - such as E-Mart Every Day or Homeplus Express - because they confuse consumers.

These small distribution stores are supermarkets run by individuals who make contracts with large retailers, like E-Mart or Lotte Mart, to purchase products from them for resale.

However, the misleading signage leads consumers to believe they are super supermarkets of discount chains, hurting small independent supermarkets and mom-and-pop stores while benefiting large retail corporations by distributing their goods.

An amendment stating that these small supermarkets supplying goods of large discount chains should also be regarded as large discount stores, and thus subject to business regulations for infringing on small merchants, was recently proposed in the National Assembly.

Under the current Distribution Industry Development Act, big-box discount chains, including supermarkets operated by giant retailers, should close their shops twice a month on Sundays or public holidays and limit their hours of operation.

Accordingly, the Federation of Korean Merchants, which represent large discount store chains, small merchants and traditional markets, came up with the compromise of banning these supermarkets from labeling themselves as subsidiary distributors at a steering committee meeting yesterday at the Korea Technology Center in Yeoksam-dong, southern Seoul.

From now on, supermarkets distributing large retailers’ goods must use stickers no larger than of which the size should be less than 50 centimeters (19 inches) in diameter that read “store deals products of certain large discount stores” attached to the entrance doors.

Those privately owned supermarkets that have put up signs with the names and logos of large discount chains should dismantle them when their contracts with the big retailers end.

To prevent confusion among consumers between direct subsidiary stores operated by large discount stores and individual contract-based supermarkets that supply their goods, the committee also decided to prohibit handing out flyers that include names of large discount store chains, wearing uniforms of large retailers and sharing vouchers or mileage points. It also decided to change the term “product supplier” to “product dealer.”

A shared-growth plan for large retailers and small wholesalers also was suggested at the committee.

“The compromise has significance in that it is the first issue determined by stakeholders through consultation since the launch of the Federation of Korean Merchants,” said Jin Byung-ho, co-chairman of the federation.

BY KIM JUNG-YOON [kjy@joongang.co.kr]