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Can kicked down road on booze kickbacks

June 29,2019
The National Tax Service said it will delay the implementation of its controversial plan to strengthen regulations forbidding kickbacks in the alcoholic beverage industry. The regulation, announced on May 31, was scheduled to kick in starting next month. The government announced on Friday that it will push back the plan it had announced in May to minimize unintended consequences.

“We will implement the regulations after coming up with a rational measure that is based on collected opinions from related government departments and communities to minimize side effects,” the government wrote in a statement on Friday.

The exact date when the regulations will kick in will be announced later.

The regulations announced define an illegal rebate, and strengthen prohibitions against wholesalers that were normally not punished for receiving kickbacks from beverage manufacturers.

The government’s announcement in May generated backlash both from the public and the industry. People feared the possible price increases, while the industry argued the revision could result in excessive regulation, and demanded a grace period.

The revised regulations had been welcomed by the Korea General Liquor Wholesalers Association. It argued the revision could promote fair competition within the wholesale industry, which is currently dominated by a handful of wholesalers.

Other associations and retailers involved in the liquor industry also expressed agreement with the government’s strengthened regulation. On Thursday, several organizations - including the Korea Alcohol & Liquor Industry Association, the Korea General Liquor Wholesalers Association and Korea Central Council of Nightspot Business - agreed to follow the revision.

BY JIN MIN-JI [jin.minji@joongang.co.kr]