These days, the prosecution, the National Tax Service, and the Korea Fair Trade Commission seem to be competitively jumping into "taming prices." All three agencies have their own main jobs, so if they are doing this, there must be a good reason, right?
A, a former bureaucrat who now advises a law firm, said this to a reporter on the 13th. Earlier, President Lee Jae-myung had publicly noted several times that food corporations were raising prices through collusion and that penalties for this should be strengthened. In particular, after the president praised the prosecution for bringing a string of major collusion cases, the National Tax Service and the Korea Fair Trade Commission (FTC) are also rushing to manage prices.
Inside and outside the government, some say it is undesirable that, to win the president's favor, the prosecution, the National Tax Service, and the Korea Fair Trade Commission (FTC) are waging an all-out "price crackdown," which is hard to see as their main job.
◇ Prosecutors who indicted "flour-sugar" collusion receive unusual praise from President Lee
The Seoul Central District Prosecutors' Office's Fair Trade Investigation Division (Director General Na Hee-seok) on the 2nd indicted 11 entities, including the corporate entities of CJ CheilJedang and Samyang Corporation and their current and former executives and employees, on charges of colluding on sugar prices. On the same day, it also indicted six flour companies—Daehan Flour Mills, Sajo Dongaone, Samyang Corporation, Daesun Flour Mills, Samhwa Flour Mills, and Hantop—and 14 individuals on collusion charges.
That day, President Lee Jae-myung shared related articles on social media (SNS) and said, "Please give credit where it's due." It was the first time since taking office that the president had publicly praised the prosecution. A day later, on the 3rd, at a Cabinet meeting, the president told Acting Prosecutor General Gu Jahyun, "The prosecution cracked down well on livelihood-related crimes and achieved significant results, and you did a really good job."
President Lee Jae-myung has repeatedly noted since the second half of last year that corporations that raise prices should be penalized. At a Cabinet meeting in Oct., he said, "If you loosen the reins on (corporations), they collude, monopolize, act high-handedly, and reap excessive profits." And at a Cabinet meeting on the 5th of this month, he said, "I hope the state will mobilize all its public authority to correct the on-the-ground problem of forcing the public to endure high inflation by exploiting monopolistic and oligopolistic situations."
◇ Korea Fair Trade Commission (FTC) and National Tax Service jump into "price management" in quick succession
At the Cabinet meeting on the 3rd, President Lee Jae-myung praised the prosecution but treated the Korea Fair Trade Commission differently, an agency often called the "economic prosecution." To Chairperson Ju Biung-ghi, the president said, "Either abolish the Korea Fair Trade Commission's exclusive right to file complaints (on collusion and other acts), or grant the right to file to a certain number of citizens to loosen (that authority)." The point was that only the Korea Fair Trade Commission has the right to file complaints in cases of violations of the Monopoly Regulation and Fair Trade Act, and its failure to properly exercise that right may be causing prices to rise. The president also said, "Even if consumers know about (price collusion on flour and sugar, etc.), they can't file complaints. Why does the (Korea Fair Trade Commission have to monopolize) the right to file?"
After that, the Korea Fair Trade Commission got busy. On the 12th, the commission imposed a 408.3 billion won penalty surcharge on CJ CheilJedang, TS Corporation, and Samyang Corporation on allegations that they colluded on sugar prices from 2021 to 2025. It was the largest penalty surcharge ever imposed on a food company since the commission's launch. Chairperson Ju Biung-ghi announced the collusion sanctions in person, saying, "Corporations that cheat and exploit should be weeded out."
There was also an assessment that the commission announced the collusion sanctions unusually quickly. Normally, after investigating a case of violating the fair trade law, the commission submits it to the plenary meeting, its internal deliberation and decision-making body. It usually takes about seven days on average to disclose the sanction results after that. In the sugar collusion case, however, the chairperson disclosed the sanctions the very next day after the plenary meeting.
The National Tax Service also moved. On the 9th, it said, "Ahead of the Lunar New Year holiday, we are launching tax audits of corporations suspected of tax evasion that are causing anxiety over grocery prices for the public." Food companies including Daehan Flour Mills, Samyang Corporation, and Sempio Food Company were reportedly among those surveyed. Since Sept. last year, the National Tax Service has been focusing its investigations on food corporations that raised prices despite declines in materials and supplies costs, and with the president prioritizing price management, it is effectively moving simultaneously with the prosecution and the Korea Fair Trade Commission (FTC).
Former bureaucrat B said, "The National Tax Service and the Korea Fair Trade Commission (FTC) were recently told at Cabinet meetings by the president that their work was slow or that they were not properly grasping pending issues," adding, "They seem to be responding nimbly to the president's directives since then."
Former bureaucrat C said, "By their main jobs, the prosecution investigates crimes, the National Tax Service collects taxes, and the Korea Fair Trade Commission responds to unfair transaction practices, but every administration tends to mobilize these agencies for price crackdowns," adding, "It's hard to see such moves as necessarily desirable."