South Korea Shields Rice Cake Makers as Livelihood-Suitable Business

The Ministry of SMEs and Startups has officially designated the manufacturing of tteokguk-tteok (rice cake for rice-cake soup) and tteokbokki-tteok (rice cake for spicy stir-fried rice cake) as a livelihood-suitable business type, restricting large enterprises from entering the sector. The designation was announced in Notice No. 2026-74 of the Ministry of SMEs and Startups, published in the Official Gazette of the Republic of Korea (Gwanbo), issue No. 21323, dated 16 September 2026.

The measure takes effect immediately and runs for five years, from 16 September 2026 to 15 September 2031. It is issued under Article 7(4) of the Special Act on the Designation of Livelihood-Suitable Business Types for Small Business Owners, and is aimed at safeguarding the survival of small manufacturers and micro-entrepreneurs who dominate this traditional food sector.

Scope of the designation

The designated activity covers rice cake manufacturing (Korean Standard Industrial Classification 10601) carried out domestically, producing and selling tteokguk-tteok and tteokbokki-tteok. The target products are defined according to the Food Code (Standards and Specifications for Foods, No. 2026-21).

Under the notice, large enterprises — those falling under any of the categories in Article 32(1) of the Act on the Promotion of Collaborative Cooperation between Large and Small Enterprises — may not acquire, commence, or expand this business during the designation period. The notice defines these terms precisely:

• Acquisition: a large enterprise taking over a business run by a small or micro-enterprise through a substantive controlling relationship, for the purpose of operating the activity.
• Commencement: a large enterprise first supplying goods or services, with the human and material requirements in place and in a state recognizable to consumers, by means other than acquisition.
• Expansion: a large enterprise selling shipments exceeding the “maximum annual shipment volume,” regardless of any increase in business sites or facilities.

The maximum annual shipment volume is calculated as the highest annual figure over the ten years preceding the designation date, combining direct-production shipments and original equipment manufacturer (OEM) shipments.

Permitted activities and limits

The notice sets out activities that are not subject to the restriction on acquisition, commencement, or expansion by large enterprises:

• Production and sale for export.
• Production and sale for supply to procurement and meal-service operators selected by central and local governments, public institutions, and schools (including military supply).
• Production and sale for self-supply within the same legal entity, including franchise supply by a franchisor to franchisees under the Franchise Business Promotion Act.
• Production and sale using domestic rice or domestic wheat.

In addition, a large enterprise’s annual shipments are permitted up to 120 percent of the maximum annual shipment volume, and SME OEM production is not restricted in terms of commencement or expansion.

Rules on changes in company size

The notice also governs what happens when a company’s size changes during the designation period. A small enterprise that grows into a large enterprise becomes subject to the notice from the year following the change, with its maximum annual shipment volume recalculated over the most recent five years. Where a small enterprise that had been supplying a large enterprise on an OEM basis grows into a large enterprise, existing transactions are still treated as SME OEM shipments up to a recognized limit, without affecting the large enterprise’s maximum annual shipment calculation. Conversely, a large enterprise that becomes a small enterprise ceases to be bound by the notice from the date of the change.

For the many small rice cake workshops and micro-entrepreneurs across Korea, the designation provides a five-year shield against entry by large corporations, helping preserve a livelihood sector that is deeply tied to Korean food culture and seasonal traditions such as tteokguk served at the Lunar New Year.

Source: Official Gazette of the Republic of Korea (Gwanbo), issue No. 21323, 16 September 2026, Section I, p. 102 (official reference: Ministry of SMEs and Startups Notice No. 2026-74).