The Ministry of Strategy and Finance said it would delay the expiration of the regulation limiting the distance between tobacco retail outlets to 2018.
The regulation, which states that all stores selling tobacco products must be at least 50 meters apart, was slated to expire this year.
Ministry officials said the government made the decision to alleviate heated competition among retailers and to prevent easy access for teens.
News reports said about 40 percent of sales at convenient stores come from cigarettes.
The regulation extension came amid mounting public sentiment to protect the livelihood of small retail shops.
The Fair Trade Commission, the country’s antitrust watchdog, however, pushed for the abolishment of the distance restriction for five franchise chains that are mostly run by small, self-employed businesspeople.
Currently, the FTC recommends a fair trade order, which requires distance restrictions of 250 meters between convenience stores, 500 meters between coffee houses and bakeries, 800 meters between fried chicken parlors and 1,500 meters between pizza parlors.
But the FTC’s recommendation is expected to be futile as the government’s new law on fair franchise business will be implemented soon.
The new law, to take effect in August 2014, stipulates that each of the franchise store owners negotiate their “operational territories” as part of their contracts with the franchise brand owners.
“After the initial settlement, the franchise brand owners will not be able to randomly reduce the area of the provided operation territory, which is why they are against the antitrust law,” an official of the FTC franchise operation unit said.
By Chung Joo-won (
joowonc@heraldcorp.com)
