A legal basis has been established to resolve the chronic unfair trade practices in which small and medium-sized enterprises (SMEs) were unable to raise delivery prices even when raw material prices skyrocketed due to differences in bargaining power according to their status as traders and endured losses while crying and eating mustard.
On the 24th of last month, the ‘Act on the Promotion of Win-Win Cooperation between Large Enterprises and Small and Medium Enterprises’, proposed by Representative Kim Gyeong-man (Democratic Party of Korea, proportional representative) of the National Assembly’s Trade, Industry and Energy Small and Medium Venture Business Committee, was reflected as an alternative to the Trade, Industry and Energy Small and Medium Venture Business Committee, and on the 8th of this month passed the plenary session of the National Assembly.
In the amendment, raw materials that account for more than 10% of the delivery price are defined as main raw materials, and the method of adjusting the delivery price when the price of the main raw material changes is obliged to be written in the contract in advance. If the consignment company avoids it by abusing its trading position, a fine of 50 million won is imposed, and the Ministry of SMEs and Startups enacts and recommends the use of standard contracts for interlocking delivery payments.
However, except for transactions in which the consignment company is a small company, the contract period is less than 90 days, and the delivery price is less than 100 million won, even if the consignment company and the consignment company agree not to interlock and make it in writing, this is also excluded.
The delivery unit price linkage system was enacted 14 years following the small and medium-sized business world requested it. During the 2008 financial crisis, the need for a unit price linkage system for delivery first emerged as the price of atomic ashes abroad soared.
However, as the effectiveness of the consultation system was virtually non-existent, small and medium-sized enterprises (SMEs) have been steadily requesting an interlocking system. It emerged as a major public livelihood bill, such as the proposal.
Rep. Kim Gyeong-man, who first proposed the unit price linkage system bill in November of last year, said, “Through the linkage system for delivery unit price, it is possible to improve the unfair trade culture in small and medium-sized businesses.” He did his best to pass the bill, including holding election campaign promises and selecting 7 major public livelihood legislation. As it has solved the long-cherished task of small and medium-sized businesses for 14 years, I hope this bill will help small and medium-sized businesses overcome the economic crisis.”