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  • Impacts of Large-Scale Retail Business Day-off on the Agricultural Sector and Its Response
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						    Impacts of Large-Scale Retail Business Day-off on the Agricultural Sector and Its Response

    저자
    Kim, Byoungryul , 김성우; 변승연
    등록일
    2016.01.26

    ※ 원문보기 클릭 시 에러가 나는 경우 조치 방법 : "고객센터 - 자주하는 질문" 참조

  • Background of Study
    Free trade of the distribution market industry that started in the mid-1990s contributes to large retailers appearing to significantly shrink the business areas of small scale retailers. As a result, the Korean government established the Act on Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises (CCLS) and revised the Distribution Industry Development Act to protect small-scale retailers, for example, retailers in conventional market places since the late 2000s to regulate business of large-scale retailers. This study aims to establish a strategy adapted to the agricultural sector by analyzing the effect of regulation of large-scale retailer’s business on farmers who produce agricultural products, retailers engaged in distribution and consumers as a buyer.

    Methodology of Study
    For this study, literature and statistic data already published were collected and analyzed. Persons in charge of purchase in top three large-scale retailers were interviewed for this study. On-site interview and telephone surveys were carried out with 197 among 278 APCs across Korea to examine the volume of marketed agricultural product and structural changes. Auctioneers and intermediate wholesalers in wholesale markets competing with large-scale retailers were interviewed to examine changes of the wholesale markets due to regulation of large-scale retailer’s business.
    An analysis (using the DID method) of consumer’s purchase pattern changes before and after large-scale retailers close their shop to comply with the regulation was made by using the consumer panel survey data of the Rural Development Administration in order to examine consumer’s agricultural product purchase patterns. The result of the questionnaire survey about changes after regulating large-scale retailers, for example, sales volumes of conventional market places and supermarkets was analyzed with the GEE model by using the panel difference model.
    In addition, weekly prices of key items before and after 2013 were used to analyze price fluctuation and the Chow Test was carried out to analyze structural changes of agriculture in order to compare and analyze agricultural product price changes. By the way, 2013 is the base year when the Large-Scale Retail Business Day-off system started to be enforced.
    The inter-industry table was used to analyze the economic effect of industries downstream/upstream of agriculture following regulation of large-scale retailers.

    Result of Study and Implications
    Although regulation of business by large-scale retailers attains its designed purpose of activating local economy by protecting small-scale business owners, the reduced part of agricultural product sold in large-scale retailer shops in compliance with the Large-Scale Retail Business Day-off System is transferred partially to medium and small-scale retailers and retailers in conventional market places located near to the large-scale retailer shops. This implies a partial effect of the System, and the Large-Scale Retail Business Day-off System leads consumers to adjust their purchase date and reduce consumption. Therefore, it is necessary to design a scheme for reducing a negative impact on the agricultural sector due to regulation of large-scale retailer’s business.
    The first suggestion is an option given to large-scale retailers for selecting whether to close their shops. The Large-Scale Retail Business Day-off days selected by most large-scale retailers are second and fourth Sundays, accounting for approximately 80%. In addition, they can discuss their retail business-off days with local government depending on their situation to specify public holidays and weekdays (normally, Wednesdays on the second and the fourth weeks). However, because most large-scale retailer’s business-off days are the second and the fourth Sundays to result in significantly reduced orders for Fridays and Saturdays, two days before the closing days. In addition, because the wholesale market is also closed on Sundays when the large-scale retailer’s shops are closed, farmers have much difficulty in marketing their products at proper time. Therefore, it is necessary to review the Large-Scale Retail Business Day-off System as an option to allow large-scale retailers to specify their business-off days on weekdays to make farmers sell their products in the wholesale market which is farmer’s substitute buyer. It seems that retailers of the conventional market places or small-scale shop owners like ordinary superettes will experience partially reduced sales and not be greatly affected even if large-scale retailer’s business-off days are selected to be weekdays, not Sundays.
    The second suggestion is to design a scheme supplementary for reduced agricultural product consumption due to regulation of business. Consumers who are large-scale retailer’s shop users or are not small-scale retailer shop users exhibit ‘evaporated consumption’ which means consumers’ no purchase and reduced consumption, due to regulation of large-scale retailer’s business. Therefore, it is necessary that the government actively supports agricultural product promotion projects, for example, farmer’s market for direct transactions. It is also necessary to enhance reliability, for example, by providing place-of-origin markings and price tags for agricultural products sold in conventional market places in order to vitalize small-scall business, for example, conventional market places. In addition, another scheme is to use public relations by media by using the item checkoff system related to promoting consumption of agricultural products. For vegetables, because it is hard to collect funds by the item checkoff system from farmers, it is thus necessary to continue to support the matching funds before applying the compulsory checkoff system by the government.
    The third suggestion is to prevent dropping prices due to excessive products marketed in the wholesale market. Local distributor’s alternative sales route is a wholesale market for the volume reduced due to regulation of large-scale retailer’s business. Because the volume of agricultural products supplied by intermediate wholesalers is relatively stable, the auction price tends to greatly drop relatively to the increasing volume of supply as the volume of supply increases. Therefore, it is inevitable that the price of the days before and after business-off days when the volume of supply increases due to regulation of business drops in comparison with its counterpart case. Therefore, it is necessary to establish a supplementary system to supply a given volume to the market if the volume of supply sharply increases in parallel with expanding the sales route by the intermediate wholesalers. This aims to supply the given volume to the market by the wholesale corporation’s decision if an excessive volume is supplied, coping with dropping farmgate price due to dropping prices in the wholesale market by establishing a supplementary scheme.
    The fourth suggestion is to stabilize sales prices and management by diversifying buyers, and expanding contracted cultivation and transactions. Farmers and seller organizations who experience reduced supply to large-scale retailers due to regulations of business, for example, Large-Scale Retail Business Day-off System, should make efforts to diversify buyers, for example, large-scale buyers including 32 wholesale markets across Korea, supply for military food suppliers, catering business owners, and food processing companies including the Garakdong Wholesale Market in addition to large-scale retailers. It is also necessary to build a system for contracted cultivation and transactions with farmer organizations and large-scale buyers in order to ensure stable farmgate prices and management. To this end, it is necessary to improve economic business capability of local Nonghyup by training task force resources specialized in distribution of local Nonghyup, to secure business specialty, capability and decision making. In addition, the government should build a system shared by farmers, Nonghyup, sellers and the government in the case of excessive profits and losses resulting from price fluctuations by improving the forward transaction system, for example, the Battegi (farm unit) contract or contracted cultivation.
    The fifth suggestion is to establish a mutual survival system for large-scale retailers, small-scale retailers and farmers. Exemplary efforts for mutual survival other than policies or regulations of large-scale retailer’s business include provision of space for small-scale retailers to sell their goods in front of large-scale retailer’s shops during their business-off days, assisting improvement of refurbishment of conventional market places, and replacement of old facilities or fittings, development and public relations of branded products, and provision of sub-shop space in the large-scale retailer’s shops. In addition, it is necessary to strengthen market dominance in the retail business sector, for example, joint purchase or delivery and transportation through cooperative associations of small-scale retailers.


    Researchers: Kim Byungryul, Kim Seongwoo, Byun Seungyeon,
    Kang Hyejung, Ahn Donghwan
    Research period: 2015. 1. ~ 2015. 10.
    E-mail address: brkim@krei.re.kr

  • 목차

    • 제1장 서론
      제2장 국내외 대형마트 규제 현황
      제3장 대형마트 농산물 구매 및 판매 실태
      제4장 대형마트 영업규제의 농산물 소매업 및 소비자 파급영향
      제5장 대형마트 영업규제의 농업부문 파급영향
      제6장 대형마트 휴무제에 대한 농업부문 대응방안

    요약문

    Background of Study
    Free trade of the distribution market industry that started in the mid-1990s contributes to large retailers appearing to significantly shrink the business areas of small scale retailers. As a result, the Korean government established the Act on Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises (CCLS) and revised the Distribution Industry Development Act to protect small-scale retailers, for example, retailers in conventional market places since the late 2000s to regulate business of large-scale retailers. This study aims to establish a strategy adapted to the agricultural sector by analyzing the effect of regulation of large-scale retailer’s business on farmers who produce agricultural products, retailers engaged in distribution and consumers as a buyer.

    Methodology of Study
    For this study, literature and statistic data already published were collected and analyzed. Persons in charge of purchase in top three large-scale retailers were interviewed for this study. On-site interview and telephone surveys were carried out with 197 among 278 APCs across Korea to examine the volume of marketed agricultural product and structural changes. Auctioneers and intermediate wholesalers in wholesale markets competing with large-scale retailers were interviewed to examine changes of the wholesale markets due to regulation of large-scale retailer’s business.
    An analysis (using the DID method) of consumer’s purchase pattern changes before and after large-scale retailers close their shop to comply with the regulation was made by using the consumer panel survey data of the Rural Development Administration in order to examine consumer’s agricultural product purchase patterns. The result of the questionnaire survey about changes after regulating large-scale retailers, for example, sales volumes of conventional market places and supermarkets was analyzed with the GEE model by using the panel difference model.
    In addition, weekly prices of key items before and after 2013 were used to analyze price fluctuation and the Chow Test was carried out to analyze structural changes of agriculture in order to compare and analyze agricultural product price changes. By the way, 2013 is the base year when the Large-Scale Retail Business Day-off system started to be enforced.
    The inter-industry table was used to analyze the economic effect of industries downstream/upstream of agriculture following regulation of large-scale retailers.

    Result of Study and Implications
    Although regulation of business by large-scale retailers attains its designed purpose of activating local economy by protecting small-scale business owners, the reduced part of agricultural product sold in large-scale retailer shops in compliance with the Large-Scale Retail Business Day-off System is transferred partially to medium and small-scale retailers and retailers in conventional market places located near to the large-scale retailer shops. This implies a partial effect of the System, and the Large-Scale Retail Business Day-off System leads consumers to adjust their purchase date and reduce consumption. Therefore, it is necessary to design a scheme for reducing a negative impact on the agricultural sector due to regulation of large-scale retailer’s business.
    The first suggestion is an option given to large-scale retailers for selecting whether to close their shops. The Large-Scale Retail Business Day-off days selected by most large-scale retailers are second and fourth Sundays, accounting for approximately 80%. In addition, they can discuss their retail business-off days with local government depending on their situation to specify public holidays and weekdays (normally, Wednesdays on the second and the fourth weeks). However, because most large-scale retailer’s business-off days are the second and the fourth Sundays to result in significantly reduced orders for Fridays and Saturdays, two days before the closing days. In addition, because the wholesale market is also closed on Sundays when the large-scale retailer’s shops are closed, farmers have much difficulty in marketing their products at proper time. Therefore, it is necessary to review the Large-Scale Retail Business Day-off System as an option to allow large-scale retailers to specify their business-off days on weekdays to make farmers sell their products in the wholesale market which is farmer’s substitute buyer. It seems that retailers of the conventional market places or small-scale shop owners like ordinary superettes will experience partially reduced sales and not be greatly affected even if large-scale retailer’s business-off days are selected to be weekdays, not Sundays.
    The second suggestion is to design a scheme supplementary for reduced agricultural product consumption due to regulation of business. Consumers who are large-scale retailer’s shop users or are not small-scale retailer shop users exhibit ‘evaporated consumption’ which means consumers’ no purchase and reduced consumption, due to regulation of large-scale retailer’s business. Therefore, it is necessary that the government actively supports agricultural product promotion projects, for example, farmer’s market for direct transactions. It is also necessary to enhance reliability, for example, by providing place-of-origin markings and price tags for agricultural products sold in conventional market places in order to vitalize small-scall business, for example, conventional market places. In addition, another scheme is to use public relations by media by using the item checkoff system related to promoting consumption of agricultural products. For vegetables, because it is hard to collect funds by the item checkoff system from farmers, it is thus necessary to continue to support the matching funds before applying the compulsory checkoff system by the government.
    The third suggestion is to prevent dropping prices due to excessive products marketed in the wholesale market. Local distributor’s alternative sales route is a wholesale market for the volume reduced due to regulation of large-scale retailer’s business. Because the volume of agricultural products supplied by intermediate wholesalers is relatively stable, the auction price tends to greatly drop relatively to the increasing volume of supply as the volume of supply increases. Therefore, it is inevitable that the price of the days before and after business-off days when the volume of supply increases due to regulation of business drops in comparison with its counterpart case. Therefore, it is necessary to establish a supplementary system to supply a given volume to the market if the volume of supply sharply increases in parallel with expanding the sales route by the intermediate wholesalers. This aims to supply the given volume to the market by the wholesale corporation’s decision if an excessive volume is supplied, coping with dropping farmgate price due to dropping prices in the wholesale market by establishing a supplementary scheme.
    The fourth suggestion is to stabilize sales prices and management by diversifying buyers, and expanding contracted cultivation and transactions. Farmers and seller organizations who experience reduced supply to large-scale retailers due to regulations of business, for example, Large-Scale Retail Business Day-off System, should make efforts to diversify buyers, for example, large-scale buyers including 32 wholesale markets across Korea, supply for military food suppliers, catering business owners, and food processing companies including the Garakdong Wholesale Market in addition to large-scale retailers. It is also necessary to build a system for contracted cultivation and transactions with farmer organizations and large-scale buyers in order to ensure stable farmgate prices and management. To this end, it is necessary to improve economic business capability of local Nonghyup by training task force resources specialized in distribution of local Nonghyup, to secure business specialty, capability and decision making. In addition, the government should build a system shared by farmers, Nonghyup, sellers and the government in the case of excessive profits and losses resulting from price fluctuations by improving the forward transaction system, for example, the Battegi (farm unit) contract or contracted cultivation.
    The fifth suggestion is to establish a mutual survival system for large-scale retailers, small-scale retailers and farmers. Exemplary efforts for mutual survival other than policies or regulations of large-scale retailer’s business include provision of space for small-scale retailers to sell their goods in front of large-scale retailer’s shops during their business-off days, assisting improvement of refurbishment of conventional market places, and replacement of old facilities or fittings, development and public relations of branded products, and provision of sub-shop space in the large-scale retailer’s shops. In addition, it is necessary to strengthen market dominance in the retail business sector, for example, joint purchase or delivery and transportation through cooperative associations of small-scale retailers.


    Researchers: Kim Byungryul, Kim Seongwoo, Byun Seungyeon,
    Kang Hyejung, Ahn Donghwan
    Research period: 2015. 1. ~ 2015. 10.
    E-mail address: brkim@krei.re.kr

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    - 명예선임연구위원
    - 소속 : 양념채소관측팀
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