Background of Research

The Government and Slaughterhouse Restructuring Council has judged it to be necessary to examine the performance of the slaughterhouse restructuring program to date and establish a direction for the future slaughterhouse restructuring program including the need to extend the Slaughterhouse Restructuring Act in 2015. It will be also necessary to evaluate the overall situation of the slaughter industry, such as the industry's status and policies including the countermeasures to reinforce the industry's competitiveness, and re-examine the direction for the development of the slaughter industry.

Research Method

In order to accomplish the purpose of the research, the opinions of diversified people concerned, including the people engaged in slaughter business, administrative officers and consumers, were heard while requesting written opinions from external experts and examining the cases of slaughterhouse restructuring in other countries such as the U.S. and Denmark. Especially the diversified opinions of related experts including the people concerned with the slaughter business were collected through a questionnaire survey and reflected in the study.

Research Results and Implications

Since the slaughterhouse restructuring program was commenced in 2009, the objective was to reduce the total number of slaughterhouses nationwide from 70 to 36, but only 29 houses were closed. The reason why the progress of the restructuring was slow was that the environment of the slaughter industry has been significantly changed together with the improvement of the slaughter business. The result of a questionnaire survey revealed that slaughterhouse operators wish to carry out a market-driven restructuring reflecting such changes in the environment instead of an artificial implementation of a government-driven restructuring. Therefore it will be necessary to convert the restructuring to be suitable for the changed environment.
The problems of the slaughter industry of Korea can be summarized as follows: first, over-competition due to surplus of slaughter facilities; second, increase in distribution cost due to consigned slaughter, deterioration of sanitation level and low operating rate; third, fortification of the bone meat distribution system due to the joint market-focused distribution system and thus increase in distribution cost; fourth, backwardness of slaughterhouses and slaughter facilities; and fifth, weak will toward the reinforcement of sanitation inspection.
The direction of slaughter industry restructuring is suggested as follows. The restructuring in our country should be carried out on an autonomous basis based on market functions instead of government-driven restructuring, and slaughterhouses should be operated by subsidiaries of cooperative unions to reduce distribution cost, to guarantee farmers the sale price and to protect consumers. For this, closing of slaughterhouses should be induced as many as possible first within a short period of time through the improvement of the slaughterhouse restructuring program. The support provided to the slaughterhouses of cooperative union subsidiaries should also be intensified to foster packers. In the long run, it is necessary to reconsider the functions of the joint market and wholesalers as they are the causes of consigned slaughter and bone meat distribution problems and to construct new high-efficiency slaughterhouses in the producing area. Lastly, it is also necessary to reinforce sanitation inspection and to announce the result of sanitation evaluation.
‘The Slaughterhouse Restructuring Act’ suggests that the current contribution money should continue to be collected up until 2015 and discontinued afterward. The financial support using the contribution money needs to be continued up until the fund is exhausted. It is suggested that the contribution money already collected should continue to be utilized to support the closing of slaughterhouses and the pertinent projects acknowledged and agreed upon by the Slaughterhouse Restructuring Council.

Researchers: Ji In-Bae, Huh Duk, and Lee Yong-Geon
Research period: 2013. 4. - 2013. 9.
E-mail address: jiinbae@krei.re.kr