Costco Wholesale Korea under fire for doing business on Sunday

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Costco Wholesale Korea under fire for doing business on Sunday

• 2012-09-11 09:48

Costco`s Busan branch (Yonhap News)

The South Korean unit of U.S. retail giant Costco Wholesale Corp. has resumed operations on Sunday at its outlets across the country, a move that local industry officials claim violates Seoul‘s policy of restricting the business of large retailers.

Local authorities in South Korea have prohibited large retailers from doing business on the second and fourth Sunday of every month to help protect mom-and-pop stores.

South Korea’s largest retailer E-Mart and other retail chains later won injunctions in several local courts to delay the implementation of the ban, paving the way for them to resume operations on the second and fourth Sunday of every month.

However, Costco Wholesale Korea Ltd. resumed its business at its seven warehouses in South Korea on Sept. 9, even though it did not take part in the legal action against the government‘s new restrictions.

Costco Wholesale said on its Web site that it will close only on New Year’s Day, Lunar New Year‘s Day and the Chuseok holiday, the Korean equivalent of Thanksgiving Day.

Costco Wholesale has said it was opposed to the restriction of its operations in South Korea.

Jeon Young-jin, an official handling the issue in Seoul’s southwestern Yeongdeungpo district, home to Costco Wholesale Korea, said his ward has asked its lawyers whether Costco Wholesale conducting business on Sunday violated the local regulations.

Jeon said Costco Wholesale will have to pay a penalty of 30,000 won (US$26) if it is found to have violated the regulations.

Costco Wholesale did not immediately respond to an email seeking comment.

An official of a small local company accused Costco Wholesale of ignoring South Korean regulations, noting local retailers that did not join the legal action are still not open for business on the designated days.

Another official of the local retail industry said government regulations could only harm South Korean companies as a foreign company is not sensitive to domestic opinions. The two officials asked not to be identified, citing the issue‘s sensitivity.

Last month, Rep. Moon Jae-in, a leading presidential contender of the main opposition Democratic United Party, called for the restriction of operations of large foreign-owned retailers to ensure they do not hurt local merchants.

“Foreign retailers seem to take steps to cooperate and work with small-sized shops and supermarkets in their own countries, but they use legal loopholes to hurt merchants here,” the lawmaker claimed. (Yonhap News)

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