The liquor wholesale association in the capital region was caught for preventing wholesalers who joined as members from offering lower prices for liquor to restaurants or bars involved in transactions with other companies for 10 years.
The Fair Trade Commission announced on the 1st that the Seoul, Incheon, Northern Gyeonggi, and Southern Gyeonggi Metropolitan Region Comprehensive Liquor Wholesaler Association (hereafter referred to as the 'Metropolitan Liquor Association') blocked price competition among wholesalers (member companies), thereby controlling the competition to secure existing transaction partners. The Fair Trade Commission decided to issue corrective orders and impose a penalty surcharge of 145 million won.
Liquor is classified for home use, restaurant and entertainment use, and large store use. Liquor manufacturers or importers supply alcohol to 'comprehensive liquor wholesalers,' which then pass it on to retail stores such as restaurants and large discount stores. Home-use liquor distribution is handled by 'liquor brokers,' who supply it to supermarkets or convenience stores. They hold different types of licenses.
The Metropolitan Liquor Association is an organization composed of businesses with establishments in the capital region, holding comprehensive liquor wholesale licenses. The association revised the 'Metropolitan Transaction Order Operating Regulations' in July 2014 to prevent member companies from offering prices lower than those supplied by existing wholesalers to their transaction partners and also barred them from securing clients by hiring employees from other wholesalers. In the regulations revised in Oct. 2022, compensation was mandated for member companies that secured transaction partners from other wholesalers.
The Fair Trade Commission judged that this 'pre-transaction system' violates the 'Monopoly Regulations and Fair Trade Act.' It also expected the corrective order to stimulate price competition for the supply of soju and beer, which are popular among the general public.
The annual transaction volume of the member companies of the Metropolitan Liquor Association is 3.6 trillion won, accounting for 55% of the domestic market. The Fair Trade Commission also expected that it would have a preventive effect on possible collusion in other regional liquor wholesale markets.