The Korea Fair Trade Commission said on the 12th it will impose a 408.3 billion won penalty surcharge on CJ CheilJedang, Samyang Corporation and TS Corporation for colluding on sugar prices from 2021 to 2025. The average penalty surcharge per company is 136.1 billion won, the largest ever for a collusion case.
◇ Three sugar makers hold 89% market share... "Met frequently to fix prices"
The Korea Fair Trade Commission (FTC) said it decided to impose a 150.6 billion won penalty surcharge on CJ CheilJedang, 130.2 billion won on Samyang Corporation and 127.3 billion won on TS Corporation for violating Article 40, Paragraph 1, Subparagraph 1 of the Monopoly Regulation and Fair Trade Act, which bans collusion. Among the FTC's collusion penalty surcharges, this is the second largest after the 2010 case involving six LPG suppliers (668.9 billion won). The FTC also issued a corrective order to the three companies to "submit written reports to the FTC twice a year for the next three years on any changes in sugar prices."
When deciding the level of penalty surcharge to impose, the Korea Fair Trade Commission (FTC) multiplies up to 20% by the sales generated through collusion, depending on the degree of the violation. It then reduces part of the amount if there are mitigating factors such as active cooperation with the investigation. The FTC estimates the three companies earned 3.2884 trillion won in sales through collusion. It applied a 15% penalty surcharge rate to that. Accordingly, the penalty surcharge that should have been imposed is 493.2 billion won. But the actual penalty surcharge imposed is 84.9 billion won less. On the reasons for the reduction, the FTC said, "It is difficult to comment."
The Korea Fair Trade Commission (FTC) imposed a record penalty surcharge on the three sugar makers because it determined they exploited an oligopolistic market to harm consumers. The three companies' market share reaches about 89% based on domestic sales volume in 2024. Sugar is known to have high entry barriers for corporations among food items. That is because large-scale facilities are needed for sugar production and high tariff rates are imposed on imports.
According to an earlier prosecution investigation, from 2021 to April 2024, CJ CheilJedang, Samyang Corporation and TS Corporation raised prices of major sugar products by up to 66.7%. The Korea Fair Trade Commission (FTC) concluded that these price hikes were carried out through collusion among the three companies.
According to the Korea Fair Trade Commission (FTC), from February 2021 to April 2025, the three companies agreed eight times on the magnitude and timing of sugar price increases and cuts. Representatives, Deputy Minister-level heads, sales executives and Head of Team-level managers from the three companies met as many as nine times a month to agree on broad price hike plans and timing, the timing of negotiations by customer, and contingency responses if talks did not go well.
It was found that the three companies raised sugar selling prices without exception whenever the price of raw sugar, the main ingredient of sugar, rose. By contrast, when raw sugar prices fell, they either did not cut prices or minimized the cuts as part of the collusion.
◇ FTC started probing before prosecutors but issued a "belated" sanction
The FTC's sanction on this day came after prosecutors on the 1st indicted the corporations CJ CheilJedang and Samyang Corporation and related executives and employees for violating the fair trade law. Prosecutors exercised their authority to request a complaint from the FTC and launched a full-fledged investigation starting in September last year. Compared with the FTC beginning on-site inspections of the three companies in March 2024, prosecutors began their probe later but produced results first.
After the indictment by prosecutors, the three companies said they would voluntarily cut prices of major sugar products. In response, President Lee Jae-myung encouraged them on social media, saying, "The prosecution achieved a major outcome."
Meanwhile, the Korea Fair Trade Commission (FTC) said the sugar collusion case involving the three companies did not meet the requirements for an order to reset prices under the fair trade law. To issue a price reset order, the violation must be ongoing, but the three companies cut sugar prices three times—in July and November last year and in January this year—while the FTC's investigation was underway.