Korean companies have been increasing their spending on entertainment and meals for their clients since 2009 despite an economic slowdown triggered by the global financial crisis, according to data by Chaebul.com, an online corporate information provider.
Manufacturers and non-manufacturers’ entertainment spending reached a total of 6.6 trillion won ($6.24 billion) in 2012, according to the website’s data compiled from the Bank of Korea, Small and Medium Business Administration and Statistics Korea.
The combined expenses accounted for 0.19 percent of total sales of 3.6 million companies in Korea.
Their 2012 spending increased about 3 percent from a year ago.
Entertainment expenses consist of costs that include meals and travel as well as rewards for clients.
The expenses have been increasing from 5.6 trillion won in 2009 to 6.1 trillion won in 2010 and 6.4 trillion won in 2011.
The government abolished a policy requiring companies to disclose entertainment expenses in their books that exceeded 500,000 won to boost consumer spending in 2009 amid the crisis.
Entertainment expenses increased even when the country’s economic growth tumbled to a 3-year low in 2012 as exports and domestic demand weakened amid the eurozone debt fiasco.
The country’s economy grew 2 percent in 2012.
The data also showed that the ratio of entertainment costs to sales was higher for smaller firms ― 0.41 percent in 2012 and 0.4 percent in 2011. The ratio was 0.08 percent in both 2012 and 2011 for large companies.
Conglomerates spent some 1.8 trillion won in 2012 for entertainment, meals and travel, 1.6 trillion won in 2010 and 1.5 trillion won in 2009. Smaller firms spent 4.8 trillion won in 2012, 4.4 trillion won in 2010 and 4.1 trillion won in 2009, the data showed.
By Park Hyong-ki and news reports (email@example.com)