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New York City's Korean-American greengrocers are gripped by an economic crisis that may have much more serious long-term consequences than the well-publicized boycott of two Brooklyn stores.
A combination of a weak local economy, too much competition and high real estate costs is driving an increasing number of these small produce markets out of business.
The ripple effect from these closings is already spreading to produce brokers and other middlemen, prompting bankruptcies among companies at the city's largest produce market, Hunts Point Terminal Market in the Bronx.
"The Korean trucking companies are the ones hardest hit," says Bruce Piel, general manager of the New York City Terminal Market.
"They started extending 60-day and 90-day credit on the retail level, hoping to keep good customers afloat.
"Because of the generally poor business environment they couldn't take the hit when these people didn't pay," he says.
The precise number of the city's 2,000 greengrocers that have closed in recent months is difficult to ascertain because these are small businesses that often disappear overnight.
Moreover, many Korean business people have been reluctant to talk to the press about their problems.
But Michael Kang, executive director of the 17-year-old Korean Produce Association, acknowledges that problems began surfacing on the retail level several years ago and became especially acute six or seven months ago.
"There are too many stores without high enough purchasing power," says Mr. Kang. "The competition has become too steep."
One reflection of the heightening problem is a recent survey by City Councilwoman Ronnie Eldridge's office, which found that in the past six months alone four Korean groceries have closed just between 96th Street and 110th Street on the Upper West Side.
The escalating cost of doing business in New York, driven by soaring rents, is a major...