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Korean Coffee Boom May Lead to Coffee Shop Distance Regulations

The demand for coffee in Seoul, South Korea, has escalated so quickly that regulators are now considering imposing distance minimums between competing coffee chains.

Coffee Factory in Seoul

“A franchise operator allows one store to open very close to another under the same brand, which reduces sales at the existing store significantly, an unnamed official with the antitrust watchdog Fair Trade Commission recently told Reuters. “This puts a lot of damage on the existing store.” The report says that the FTC plans to discuss regulations with existing chain owners, with an announcement of guidelines coming in September.

Starbucks, which entered South Korea in 1999 is widely credited with leading the charge in the country’s booming coffee culture, not only by creating demand among the country’s youth, but by elevating the market value.

“I am very grateful to Starbucks,” Yeo Seon-koo, owner of Yeondoo, an independent coffee shop in Seoul told Reuters. “Koreans were previously used to spending 300 won for a cup of coffee, but Starbucks has made them willing to pay nearly 5,000 won, whether they like it or not.”

According to the Korean Customs service, coffee imports have jumped 44 percent in the past four years.

The full story: Reuters


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