Regulatory momentum is building around South Korea’s rapidly expanding wholesale food stores — retailers that have long existed in a gray zone of distribution laws.

A bipartisan consensus is emerging in the National Assembly, with both ruling Democratic Party and opposition People Power Party lawmakers expressing support for new legislation, now in its final drafting stages.

Some of these stores have avoided classification as large-scale retailers by exploiting loopholes such as “business site splitting,” allowing them to operate 24/7, year-round.

Their unregulated expansion has raised concerns over market disruption and unfair trade practices, particularly in their dealings with smaller suppliers.

According to Representative Oh Se-hee of the Democratic Party, who led a government-requested survey on the issue, the Ministry of Trade, Industry and Energy has completed its investigation into wholesale food marts nationwide. Oh plans to submit two related legislative amendments shortly.

One amendment to the Distribution Industry Development Act would classify food marts as quasi-large-scale stores based on size and annual sales, applying rules similar to those governing big-box retailers.

A second bill would revise the Large Scale Retail Act to define multiple attached buildings—often presented as separate shops—as a single store for regulatory purposes.

Currently, certain food marts are able to skirt large retailer rules by segmenting store space into multiple buildings, each under 1,000 square meters and with annual sales under 100 billion won ($73.5 million), thereby avoiding obligations such as mandatory twice-a-month closures, opening-hour limits, and proximity restrictions near traditional markets.

Oh emphasized that the goal is not to eliminate wholesale food marts but to promote fair trade by applying consistent rules.

“These retailers need to operate under a transparent framework that protects suppliers and traditional merchants alike,” she said.

Opposition lawmakers are also backing the cause.

In October last year, Representative Kim Seong-won and nine other People Power Party legislators introduced an amendment to designate stores with a combined floor area between 900 and 3,000 square meters as quasi-large-scale retailers subject to similar operating hour restrictions and closure mandates.

Kim criticized the current loopholes, saying that food marts enjoy the benefits of big-box scale while avoiding regulations, often setting up shop in residential neighborhoods and competing unfairly with traditional and small retailers.

Both parties now argue that some food marts are distorting the market and threatening the livelihoods of traditional merchants.

Complaints have surfaced about coercive practices such as demanding suppliers provide goods below cost under the guise of promotional sales or “customer appreciation” events.

Oh said her office had requested data from the Ministry of Trade, Industry and Energy on the locations of food marts and their proximity to traditional markets, as well as their treatment of suppliers.

She reiterated the intent to classify them as quasi-large retailers and prohibit the practice of site splitting, which deceives consumers into perceiving fragmented spaces as a single integrated store.

Industry players have broadly welcomed the legislative efforts but remain cautious. Some fear that even if the laws pass, new workarounds may emerge.

“Wholesale food marts are essentially the same as large-format retailers but have chipped away at market share by avoiding regulation,” said an industry insider. “These new laws are overdue, but enforcement must be sustained to prevent new loopholes.”

According to financial disclosures, the combined sales of Korea’s top three wholesale food mart operators surged from 325.1 billion won in 2014 to nearly 1.5 trillion won last year.

In contrast, the combined revenue of the top three large-format retailers declined from 25.3 trillion won to 24.3 trillion won over the same period, data showed.

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