Rice cake, tteokbokki manufacturing redesignated as livelihood-protected sector; large firms face expanded shipment cap

The manufacturing of rice cake soup slices and tteokbokki rice cakes has been redesignated as a livelihood-suitable sector for small business owners. Large companies will be barred from entering or expanding in the market for the next five years, though existing firms will be allowed to ship more product to reflect market growth.

The Ministry of SMEs and Startups announced Friday that its Livelihood-Suitable Sector Deliberation Committee met Thursday and voted to redesignate the manufacturing of rice cake soup slices and tteokbokki rice cakes as a livelihood-suitable sector. The designation runs from Sept. 16, 2026, through Sept. 15, 2031. Under the designation, large companies are in principle barred for five years from acquiring, launching or expanding operations in the sector.

The livelihood-suitable sector regime was introduced under a special act enacted in 2018 to protect the livelihoods and business stability of small-scale proprietors.

The sector covers the domestic production and sale of rice cake soup slices and tteokbokki rice cakes — both classified as rice cake products under the Korean Food Standards Codex. It was first designated a livelihood-suitable sector in 2021, given the low barriers to entry and the high proportion of small operators.

The committee reached its redesignation decision after a comprehensive review of the protective effects the original designation had on small business owners, as well as the sector's market growth and the potential impact on industrial competitiveness and consumer welfare.

However, the annual shipment allowance for large companies has been raised — from 110 percent of the highest annual output in the previous five years to 120 percent of the highest annual output in the previous 10 years. The adjustment is intended to provide a degree of production security for companies that reduced their output to comply with the original designation, while also reflecting growth in the rice cake soup slice and tteokbokki rice cake market.

Large companies producing for export or manufacturing under a small and medium-sized enterprise original equipment manufacturing arrangement remain exempt from shipment restrictions, as before. Products made and sold using domestically grown rice or wheat may also be shipped without restriction, subject to a separate deliberation.

"This decision strikes a balance between the protective effects the original designation had on small business owners and the market's growth trajectory," said Lee Eun-cheong, director general for win-win cooperation policy at the Ministry of SMEs and Startups. "We will monitor and review implementation to ensure the redesignation is carried out without disruption."