The Ministry of SMEs and Startups announced on the 9th the results of its recent "ex officio investigation into the price-indexation system for payments in plastic container supply transactions."
The investigation was launched urgently in April to check whether the price-indexation system for supply payments is functioning in line with its purpose on the ground, as international oil prices and the prices of naphtha and ethylene, raw materials for plastic, surged due to the Middle East war, increasing cost burdens on small and medium-sized plastic container manufacturers.
The Ministry of SMEs and Startups (MSS) selected a total of 15 commissioning corporations in three industries with high demand for plastic container supply—food manufacturing, beverage manufacturing, and coffee franchises—as those surveyed and conducted a prior written survey. Based on the written survey, it conducted in-depth inspections by combining on-site investigations with surveys of commissioned corporations for seven corporations in total, including those suspected of violating the law, those that submitted documents inadequately, and those with many commissioned corporations.
As a result, it uncovered violations of the Act on the Promotion of Win-Win Cooperation Between Large Enterprises and SMEs (hereinafter the Win-Win Cooperation Act) by four corporations, including two in food manufacturing and two coffee franchises. The detailed violations detected totaled 23, including five cases of delayed issuance of contracts, six cases of delayed issuance of indexation contracts, and 12 cases of non-issuance of indexation contracts.
The Ministry of SMEs and Startups (MSS) imposed administrative dispositions under the Win-Win Cooperation Act on the four violating corporations identified in this investigation, taking into account the extent of the violations, including "improvement orders," "imposition of 2 penalty points," "fines (up to 10 million won)," and "education orders."
Lee Eun-cheong, director general of the Win-Win Cooperation Policy Bureau at the Ministry of SMEs and Startups (MSS), said, "It runs counter to a fair market economy for small commissioned corporations to shoulder unilaterally the burden caused by the surge in global raw material prices," and added, "We will continue to check compliance with the price-indexation system for supply payments so that a transaction culture in which large corporations and SMEs share the burden of materials and supplies can take root."