The Ministry of SMEs and Startups said on the 2nd it will conduct an ex officio investigation into the delivery price indexation system for plastic container transaction.
International oil prices and synthetic resin feedstock prices are on the rise as the U.S.-Iran conflict drags on. As of the 20th of last month, the unit prices of naphtha and ethylene, which are plastic feedstocks, stood at $1,171 and $1,425 per ton, respectively. They surged 83.0% and 109.6% from the end of the previous month, increasing cost burdens for small plastic container manufacturers.
Accordingly, the Ministry of SMEs and Startups (MSS) will launch an investigation to check whether plastic container manufacturers are easing the burden of rising materials and supplies prices through the delivery price indexation system. The delivery price indexation system reflects increases or decreases in delivery prices when the prices of key materials and supplies fluctuate.
Those surveyed are a total of 15 commissioning corporations across three industries: food manufacturers, beverage manufacturers, and coffee franchises.
Key inspection items include: ▲ whether the delivery price indexation system is concluded and implemented ▲ unfair determination of delivery prices ▲ nonpayment of delivery prices ▲ evasion such as forcing non-indexation agreements ▲ noncompliance with the delivery price adjustment consultation system. The delivery price adjustment consultation system is a procedure in which ordering and commissioned companies consult to adjust prices when supply costs (materials, labor, and expenses) change.
If unfair transaction practices, such as passing on the increase in materials and supplies prices, are detected, the ministry plans to respond with improvement requests, corrective orders, and penalty points under the Win-Win Cooperation Act. If the supply-demand imbalance of materials and supplies persists, it plans to conduct additional ex officio investigations in industries expected to suffer damage.
Lee Eun-cheong, director general for Win-Win Cooperation Policy at the Ministry of SMEs and Startups (MSS), said, "It runs counter to a fair market economy for small commissioned companies to shoulder the burden amid a surge in global raw material prices," and added, "We will conduct checks so that a fair transaction culture where large and small companies receive proper prices can take root through the delivery price indexation system."