The Korea Laying Hen Association, suspected of artificially driving up egg prices, has become the subject of a sanction review by the Korea Fair Trade Commission. As the government recently signaled it would closely examine the structural causes of rising food prices, attention is focused on the Korea Fair Trade Commission (FTC) full commission's decision.
According to industry sources on Feb. 5, the Korea Fair Trade Commission (FTC) submitted to the full commission a review report seeking a corrective order and a penalty surcharge, concluding that the Korea Laying Hen Association led price hikes for eggs with its member companies and restricted competition. The report was also delivered to the association, according to reports.
The Korea Fair Trade Commission (FTC) believes the association continuously intervened in the egg price formation process from around 2023 through last year, effectively determining price levels. The FTC's view is that association-level activities induced member companies to raise prices, distorting market competition.
Egg prices, in fact, trended upward for an extended period. According to the consumer price index of the Korean Statistical Information Service (KOSIS), egg prices rose year over year for 10 consecutive months from April last year through last month. In particular, the growth rate exceeded 9% in September last year, marking the highest level in recent years.
Consumer-perceived prices also climbed sharply. Based on the Korea National Council of Consumer Organizations' Price Information Service, the price of a tray of 30 eggs in July last year topped the 8,500-won range, rising by a double-digit percentage from the previous year's average.
The Ministry of Data and Statistics (MODS) has pointed to a decline in shipments of laying hens due to the spread of highly pathogenic avian influenza (AI) as a key driver of price increases. However, the Korea Fair Trade Commission (FTC) believes egg prices began to rise steeply even before AI outbreaks, and that organized activities by the association likely influenced the process.
The Fair Trade Act prohibits business associations from restricting competition by setting, maintaining, or changing prices. If a violation is recognized, a corrective measure may be imposed along with a penalty surcharge. Senior government officials recently said it is necessary to scrutinize the backdrop of rising food prices and called for active checks on possible collusion.
The Korea Fair Trade Commission (FTC) plans to finalize whether the law was violated and the level of sanctions by holding a full commission meeting after reviewing the Korea Laying Hen Association's written opinion.