Retailers react to antigraft law

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Retailers react to antigraft law

With the much-disputed anticorruption law deemed constitutional on Thursday, local retailers are coming up with their own strategy to circumvent the new legislation slated to go into effect on Sept. 28. However, the remaining ambiguity in some of the clauses is sparking controversy among related parties.

“Every back-up plan we are coming up with is nothing more than a temporary solution,” said a spokesperson for a local retail giant. “It won’t be able to prevent sales from eventually dropping.”

The gist of the new constitutional law is that public officials, journalists and private school faculty cannot be served meals that cost more than 30,000 won ($26.70) or receive gifts that cost more than 50,000 won from people associated to a related business sector.

Within the remaining two months, retailers will have to restructure the components in a lot of their gift sets. Lotte and Hyundai Department Stores have increased the supply of gift sets that cost less than 50,000 won from 20 to 30 percent.

“Most of the gift sets sold at department stores cost over 200,000 won,” said a spokesperson for Lotte Department Store. “There are no adequate items to make a gift set if we have to mark it down below 50,000 won.”

Responses from the hotel business sector have varied so far. One spokesperson for a five-star Seoul-based hotel said, “meals cheaper than 30,000 won are simply impossible for us so we are not even considering any back up plans in that sector.”

However, small or mid-size hotels will be more directly affected by the legislation.

“We are mulling over whether or not to sell our 40,000-won meals for 30,000 won from September,” one spokesperson for a Gangnam-based business hotel said.

Conglomerates that inevitably have to deal frequently with public officials and reporters are renewing their business-meeting manuals.

Samsung Group, the nation’s largest conglomerate, said it will focus on completing the renewed manual in the remaining two months, but did not reveal any further details.

LG Group also said it will “make an educational program with the corporate legal team based on the instructions expected to be published by Anticorruption & Civil Rights Commission soon.”

Hyundai Motor Group has a similar plan.

Aside from the rigid price cap the new anticorruption law is imposing on companies, what is causing more confusion is how the still-vague law will be applied to the countless number of unexpected situations that may result.

For example, if a journalist or public official attends a group dinner but does not eat their plate of food, which costs more than 30,000 won, how should he or she prove this if the matter is raised later?

Also, if one person receives two 50,000-won gifts from two employees from the same company, would that be illegal?

Top steelmaker Posco was worried whether they should continue their yearly press tour to overseas factories.

“We haven’t figured out yet if providing the transportation fee would be considered providing money to journalists,” a Posco spokesperson said.

Huh Chang-soo, chairman of the Federation of Korean Industries, expressed concern on Thursday that the new legislation would become obsolete when it actually goes into effect as he has witnessed cases where inefficient legislations gradually come to have no constitutional power.

“Laws that are unrealistic are bound to be compromised,” he said.


BY PARK TAE-HEE, JEON YOUNG-SUN AND JIN EUN-SOO [jin.eunsoo@joongang.co.kr]

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