A view of the Korea Fair Trade Commission at the Government Complex Sejong in Sejong City/Courtesy of News1

The Korea Fair Trade Commission said on the 12th it will impose a 3.165 billion won penalty surcharge and corrective orders on nine businesses on allegations they agreed on bid prices when supplying pork to E-MART.

The businesses sanctioned by the Korea Fair Trade Commission (FTC) for alleged collusion are Daesung Sileop, Daejeon Chungnam Pig Farming Livestock Cooperative, Bugeong Pig Farming Cooperative, CJ Feed&Care, Dodram Food, Bodam, Sunjin, FarmStory, and Haedream LPC. The Korea Fair Trade Commission (FTC) said it will refer the first six of these to prosecutors.

According to the investigation, the collusion took place in bids for both general meat and branded meat. General meat is pork sold as domestic pork without distinguishing which meat processor produced it, while branded meat is sold with a meat processor's brand label. Branded meat is priced higher than general meat because feed or the pigs' rearing environment is managed with distinctive features.

First, in the general meat bids, eight companies excluding Bodam agreed eight times from Nov. 3, 2021, to Feb. 3, 2022, on bid prices and floors by cut, including samgyeopsal and neck. They were concerned that the supply unit price would fall further ahead of E-MART's anniversary event. The bid price agreements were made in a Telegram group chat attended by each company's manager, the commission said. The contract amount for the eight bids totaled 10.3 billion won.

Chat messages from a Telegram room set up for collusion by nine pork processing and sales businesses/Courtesy of the Korea Fair Trade Commission

In the branded meat bids, five companies—Dodram Food, Bodam, Sunjin, FarmStory, and Haedream LPC—reached 10 agreements on quoted prices by cut from July 1, 2021, to Oct. 11, 2023. The branded meat price agreements were also made via Telegram, KakaoTalk, and phone calls, the commission said. The contract amount for the 10 bids was 8.7 billion won.

The Korea Fair Trade Commission (FTC) applied Article 40, Paragraph 1, Items 1 and 8 of the Monopoly Regulation and Fair Trade Act, which prohibit price and bid collusion, to the nine businesses. The Korea Fair Trade Commission (FTC) said, "E-MART sets retail prices by adding a certain margin to the price at which it procures pork," and noted, "Increases in supply prices caused by the companies' collusive conduct resulted in an unfair outcome in which consumers had to bear higher prices."

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