Lotte faces nationwide boycott
By Park Si-soo
Civic groups called for a nationwide boycott of products made by retail giant Lotte Group, Monday, to put pressure on the conglomerate to follow state guidelines aimed at helping small stores.
The group’s beverages, alcohol and confectionary products are expected to be pulled from restaurants, bars, and mom-and-pop stores in a protest initiated by two unions representing 2 million self-employed business owners.
The Save Local Stores Alliance and the Voter Citizenship Behavior said their boycott of the products began on Monday and the collective action will continue until Lotte ensures equal fees are imposed on using credit cards at big and small retailers.
On the same day, the Fair Trade Commission (FTC) raided the headquarters of Lotte Mart. Some 16 FTC officials searched sales documents and computer files.
Civic groups are considering staging similar protests against other firms with the same policy. They also called on Lotte to stop opening its discount malls on weekends, as requested by the government in a bid to improve profitability of small retailers amid the prolonged economic downturn.
“We started boycotting Lotte products as the firm ignored our repeated calls (on abolishing its discriminative policy on credit card charges),” the unions said in a joint statement.
“We want this measure to be viewed by the public and Lotte as a move to save the faltering livelihoods of small retailers with no strings attached.” They said more than 600,000 restaurants, bars, and mom-and-pop stores have joined the campaign.
A Lotte spokesman said the firm will take a wait-and-see stance on the matter.
“There is nothing we can immediately decide,” he said. “We have played by the rules. Our credit card fees are set within legal limits and our weekend operations are also legitimate.”
Information regarding Lotte’s sales reliance on small outlets was not immediately available, but another official said the boycott, if it continues for a long period, could “pose a threat” to the firm’s bottom line.
This comes two weeks after the Financial Services Commission amended a rule to ban suppliers from imposing higher fees on credit card use at small retailers.
Under the new rules that will take effect in December, shops will pay 1.5 percent of credit card bills in fees regardless of the size of the store. Currently, major suppliers, including Lotte, have imposed charges of 1.8 to 2 percent at small retailers, while at retail giants such as Home plus, E-Mart and Lotte Mart it ranges from 1.5 to 1.7 percent.
Big retailers and discount malls have put pressure on suppliers to keep credit card fees at a low level using their growing market clout. A handful of retail giants and discount malls here dominate major sales channels and have pushed their smaller rivals to the edge.
“A small number of big retailers have occupied more than 50 percent of the country’s retail market, which poses a great threat to the livelihoods of their smaller rivals,” a key union member said. “We want Lotte to change its policy so that big and small retailers can survive in a peaceful manner.”
The protest takes place as the government switches its shared-growth campaign into higher gear. Under the campaign, the government has come up with a variety of ways for co-prosperity between big and small firms.