Anti-corruption law threatens beef, retail, golf industries

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Anti-corruption law threatens beef, retail, golf industries

The implementation of a controversial anti-corruption law is scaring the retail and restaurant industries, who fear that gifts and free meals will become illegal.

The so-called Kim Young-ran law, named for a former Supreme Court Justice and Chairwoman of the Anti-Corruption and Civil Rights Commission who inspired it, was promulgated and signed by President Park Geun-hye in March 2015 and will be implemented from September 28. It forbids people in a range of professions from accepting meals that cost over 30,000 won ($26), gifts valued over 50,000 won and cash payments over 100,000 won.

Public officials fall under the law but also teachers, professors and even journalists. They are considered “public” professions by the lawmakers who passed the bill.

“A lunch menu at our Chinese restaurant is priced at 39,500 won,” said Oh Hee-jin, a manger at the Ritz-Carlton Seoul. “We are looking into lowering this to 30,000 won.”

Lotte Department Store is looking at reducing the size of gift sets to get their price tags below 50,000 won each.

But lowering prices is not a viable option for everyone.

“Hotels are supposed to take pride in providing the best services and food,” said a manager at the Shilla Hotel. “We can’t do that anymore if we start lowering prices on everything.”

Some restaurant owners are closing stores altogether. Some 30 vacant sites in Insa-dong, central Seoul, were once restaurants.

“Since April, restaurants have been closing one after another,” said a real estate agent near Insa-dong. “Restaurant owners used to rent space and pay a 200 million won premium. Now they won’t sign a deal even when I’ve lowered the premium to just 100 million won.”

“Once the law is implemented,” said the owner of a restaurant that specializes in Korean traditional food in Insa-dong, “the officials will stay away from restaurants with menus priced higher than 30,000 won. And that restrictive atmosphere will eventually kill our businesses.”

Farmers are unhappy because they make a lot on gift sets during holiday periods.

According to the National Agricultural Cooperative Federation (NACF), 40 percent of agricultural, livestock and farm products are sold during the holidays. And more than 50 percent of fruit gift sets, 70 percent of ginseng, and 98 percent of domestic beef is sold at prices higher than 50,000 won.

The average yearly sales of domestic beef is expected to drop by half once the anti-corruption law is implemented.

The Kim Young-ran law is also expected to hurt the golf industry.

It costs between 250,000 won to 500,000 won per person to play a round of golf, when you include fees for caddies, golf carts and meals and drinks after the game.

Officials are getting in their golf games while they can. “Our customers grew some 20 percent compared to this time last year,” said a manager of a golf course in Yongin, Gyeonggi. “I’m not sure if I should be laughing or crying.”

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