On March 12, the Korea Fair Trade Commission (FTC) officially announced that it had imposed fines totaling 3.15 billion won (approximately 14.4 million yuan or $2.13 million) on nine pork processing and related companies suspected of price manipulation, in accordance with the law. The FTC also issued corrective orders and referred six of these companies to prosecutors for further investigation, in order to crack down on unfair competition in the pork distribution sector and uphold fair market order and consumer rights.
According to reports, the nine penalized companies include Daesung Industries, Daejeon Chungnam Pig Farming Cooperative, Pukyeong Pig Farming Cooperative, CJ Feed&Care, Dodram Food, Bodam, Sunjin, Parmstory, and Haedream LPC. These companies span various sectors, including pork processing and livestock cooperatives, and were all found to have engaged in illegal activities—specifically, bid-rigging and price manipulation—when supplying pork products to the major South Korean discount retailer E-Mart.
According to an investigation by the Korea Fair Trade Commission, the violations committed by these companies fall into two main categories: First, in E-Mart’s procurement tenders for “general pork” (sold under the label “domestic pork” without specifying the supplier), eight of the implicated companies pre-coordinated bid prices or price floors for various pork cuts in eight out of 14 tenders held between November 2021 and February 2022, with the cumulative contract value reaching 10.3 billion won; second, during the quotation process for “branded meat” (labeled with company brands and marketed as specialty-raised), five companies colluded to set quotation prices before submitting bids on 10 occasions between July 2021 and October 2023, involving a contract value of approximately 8.7 billion won.
Moon Jae-ho, Director of the Cartel Investigation Bureau at the Korea Fair Trade Commission, stated that the collusive behavior of these companies directly caused abnormal fluctuations in pork supply prices, resulting in a pattern where “prices rose more than the market rate when prices increased and fell less than the market rate when prices decreased.” This ultimately drove up retail prices, forcing consumers to bear unreasonable additional costs, which constitutes a serious violation of the Fair Trade Act. The penalties were determined based on the severity of the violations, with a 7% base rate applied to collusion involving regular pork and a 9% base rate applied to collusion involving branded pork. The fines imposed on the nine companies ranged from 53 million won to 680 million won.
It is worth noting that this is not the first time South Korea has taken action against price manipulation in the essential foodstuffs sector. Recently, the South Korean government, led by the Fair Trade Commission, has been conducting inter-ministerial joint operations focused on cracking down on price-fixing collusion and unfair competition in essential foodstuffs such as flour, white sugar, eggs, and pork. Previously, it had already initiated investigation and penalty procedures against several sugar and flour companies.
Industry analysts believe that the long-standing issue of high prices in South Korea’s pork market is driven not only by factors such as production costs and disease outbreaks, but also by monopolistic practices and unfair competition in the distribution sector. The FTC’s severe penalties serve not only as a warning to the companies involved but also as a regulatory measure to ensure compliance within the South Korean pork industry. As regulatory oversight intensifies, this is expected to help the industry break down profit-driven barriers and alleviate the public’s concerns over excessively high retail prices.
Currently, the implicated companies have not yet responded publicly to the penalty. The six companies referred to the prosecution will face further judicial investigation. Bidu Agricultural Science will continue to monitor the subsequent outcomes of these proceedings and the industry’s corrective measures.
Disclaimer: Some of the information in this article is sourced from the internet. Sources have been clearly cited, and copyright belongs to the original authors. The content is provided for readers’ reference only. If any rights of the original authors have been infringed, please contact us promptly via the comments section so we may remove the content.
According to reports, the nine penalized companies include Daesung Industries, Daejeon Chungnam Pig Farming Cooperative, Pukyeong Pig Farming Cooperative, CJ Feed&Care, Dodram Food, Bodam, Sunjin, Parmstory, and Haedream LPC. These companies span various sectors, including pork processing and livestock cooperatives, and were all found to have engaged in illegal activities—specifically, bid-rigging and price manipulation—when supplying pork products to the major South Korean discount retailer E-Mart.
According to an investigation by the Korea Fair Trade Commission, the violations committed by these companies fall into two main categories: First, in E-Mart’s procurement tenders for “general pork” (sold under the label “domestic pork” without specifying the supplier), eight of the implicated companies pre-coordinated bid prices or price floors for various pork cuts in eight out of 14 tenders held between November 2021 and February 2022, with the cumulative contract value reaching 10.3 billion won; second, during the quotation process for “branded meat” (labeled with company brands and marketed as specialty-raised), five companies colluded to set quotation prices before submitting bids on 10 occasions between July 2021 and October 2023, involving a contract value of approximately 8.7 billion won.
Moon Jae-ho, Director of the Cartel Investigation Bureau at the Korea Fair Trade Commission, stated that the collusive behavior of these companies directly caused abnormal fluctuations in pork supply prices, resulting in a pattern where “prices rose more than the market rate when prices increased and fell less than the market rate when prices decreased.” This ultimately drove up retail prices, forcing consumers to bear unreasonable additional costs, which constitutes a serious violation of the Fair Trade Act. The penalties were determined based on the severity of the violations, with a 7% base rate applied to collusion involving regular pork and a 9% base rate applied to collusion involving branded pork. The fines imposed on the nine companies ranged from 53 million won to 680 million won.
It is worth noting that this is not the first time South Korea has taken action against price manipulation in the essential foodstuffs sector. Recently, the South Korean government, led by the Fair Trade Commission, has been conducting inter-ministerial joint operations focused on cracking down on price-fixing collusion and unfair competition in essential foodstuffs such as flour, white sugar, eggs, and pork. Previously, it had already initiated investigation and penalty procedures against several sugar and flour companies.
Industry analysts believe that the long-standing issue of high prices in South Korea’s pork market is driven not only by factors such as production costs and disease outbreaks, but also by monopolistic practices and unfair competition in the distribution sector. The FTC’s severe penalties serve not only as a warning to the companies involved but also as a regulatory measure to ensure compliance within the South Korean pork industry. As regulatory oversight intensifies, this is expected to help the industry break down profit-driven barriers and alleviate the public’s concerns over excessively high retail prices.
Currently, the implicated companies have not yet responded publicly to the penalty. The six companies referred to the prosecution will face further judicial investigation. Bidu Agricultural Science will continue to monitor the subsequent outcomes of these proceedings and the industry’s corrective measures.
Disclaimer: Some of the information in this article is sourced from the internet. Sources have been clearly cited, and copyright belongs to the original authors. The content is provided for readers’ reference only. If any rights of the original authors have been infringed, please contact us promptly via the comments section so we may remove the content.