South Korea's leading businesses said Wednesday they will make early payments to their subcontractors for the Chuseok holidays next month, not a rare move but more highlighted this year because of a serious sap in domestic consumption.
The country's top conglomerate, Samsung Group, said it will pay 1.8 trillion won to its suppliers earlier than scheduled, with 18 of its affiliates, including Samsung Electronics Co. and Samsung SDI Co., joining the move.
Chuseok falls on Sept. 8 this year. The three-day holiday follows a weekend, extending one of the two most celebrated holidays in South Korea to five days this year.
Millions of people travel to their hometowns for Chuseok with gifts for families and relatives, creating a peak season for retailers.
LG Group said it is also pushing up the dates it makes payments to its business partners. Ten of its affiliates, including the mainstay LG Electronics Inc., will settle a combined 1.1 trillion won by Sept. 5.
Hyundai Motor Group, the world's fifth-largest automobile giant that has Hyundai Motor Co., Kia Motors Co. and Hyundai Mobis Co.
under its wing, will settle a payment worth 1.1 trillion won to its 2,000 subcontractors.
Hyundai Department Store Group will pay 120 billion won to the 2,600 small and midsized companies it works with a week ahead of Chuseok.
"The decision was made to ease the burden for partners who face financial difficulties around Chuseok due to an increased cost for holiday bonuses," an official from the retail group said.
The government says local consumption has not picked up to a comfortable level after the deadly ferry sinking in April, which left more than 300 people dead, discouraged spending as the nation mourned the tragedy. Public employees were told to take vacations and travel to revive spending, especially in southern regions hit hardest by the dampened consumption.
Along with earlier payments, Samsung Group said it plans to give 30 billion won worth of vouchers as gifts to employees and subcontractors to be used at traditional markets.
"To beef up domestic consumption and vitalize the agricultural and fishery industry, and also to seek a shared growth with suppliers, we have prepared a set of measures," Samsung said in its official release.
The gift vouchers can only be used to buy agricultural and fishery goods from traditional markets.
LG said it will also distribute similar coupons to its workers, although it did not reveal the specific amount.
Samsung will also open temporary markets at its 37 key facilities across the country through Sept. 19 in cooperation with 135 towns in rural regions. Around 50 products, including beef, fruits and rice, will be sold at reasonable prices, it said. (Yonhap)