Four types of soy sauce, doenjang (fermented soybean paste), gochujang (red chili paste), and cheonggukjang (fast-fermented soybean paste) manufacturing industries have been reappointed as appropriate livelihood industries. Large companies are not allowed to acquire, start, or expand operations in this field for the next five years.

The Ministry of SMEs and Startups announced on the 17th that it held a committee composed of private commissioners for the reassignment review of the four types of soy sauce manufacturing (soy sauce, doenjang, gochujang, cheonggukjang) on the 16th.

The committee decided to reassign the four industries while considering the necessity for the small business owners' solvency and stable protection, as well as equilibrating the review of industrial competitiveness and impact on consumers.

Korean soybean paste, red pepper paste, soy sauce. /Courtesy of Korea Heritage Service

The appropriate livelihood industry system, established under the Special Act on the Designation of Appropriate Livelihood Industries for Small Business Owners enacted in 2018, aims to protect the survival rights of micro small business owners, and large companies are generally prohibited from acquiring, starting, or expanding operations related to appropriate livelihood industries for five years.

The soy sauce manufacturing industry is experiencing stagnation due to domestic consumption decline, with a high proportion of small business owners and deepening insolvency. It was designated as an appropriate livelihood industry in 2020, and the designation period expired at the end of last year.

The committee decided to restrict the items and scope of regulation to the same as the previous designation, limiting it to products mainly operated by small business owners that are in bulk (8 liters or kilograms and above).

With increased demand for K-food, the export amount of traditional soy sauces and various seasoning sauces reached a record high of $384 million in 2023, continuing its growth trend. Therefore, new product development and overseas exports related to sauces and mixed sauces will be excluded from regulation.

While domestic market demand is decreasing, the market share of large companies is expanding; thus, the industries will be designated as appropriate livelihood industries. However, it was also noted that retail markets with significant market dominance by major companies make it difficult for small business owners to enter or expand.

The method of regulating large companies will undergo substantial reform.

The committee decided to relax regulations by allowing the transition to direct production and OEM (original equipment manufacturing) within the total range of shipment allowances to support the free operational activities of large companies. Additionally, recognizing the necessity of expanding the domestic market share of small business owners, many large companies agreed to adjust the shipment allowance for regulated products to around 10%.

A new exception regulation that allows unlimited OEM quantities for small business owners will also be introduced. The cheonggukjang manufacturing industry will exclude natto, primarily operated by large companies, from regulation, allowing unlimited production and sales of OEM quantities supplied by small and medium-sized businesses.

The designation period of the appropriate livelihood industries for soy sauce, doenjang, gochujang, and cheonggukjang is five years from February 1, 2025, to January 31, 2030.