The Korea Fair Trade Commission said on the 25th that it issued a corrective order against Naturespharm Co. for forcing pharmacies to adhere to the sales prices of its health functional foods.
Naturespharm is a corporations that mainly sells children's vitamin and mineral products and probiotics. According to a Korea Fair Trade Commission (FTC) investigation, from October 2017 to August last year, for about seven years, the company posted consumer sales prices in notices on a members-only shopping mall and forced transaction pharmacies to follow them.
To enforce this, Naturespharm used various channels, including website banners, mass text messages, and Kakao open chat rooms. It labeled discount sales, free gifts, and supply to non-transaction clients as "abnormal sales," pressuring sales at list price, and it also asked transaction pharmacies to report other pharmacies that violated this.
When a tip was received, the company verified the facts through a mystery shopper firm, then imposed disadvantages in order of a first warning and a second suspension of supply. During the period in question, at least 75 pharmacies were actually sanctioned.
Even when its products were sold at a discount at non-transaction pharmacies or online, the company traced back the pharmacies that had supplied those products through barcode tracking and other means and imposed sanctions, and it also used a method of disclosing a list of transaction-suspended pharmacies in a group chat to pressure clients.
An official at the Korea Fair Trade Commission (FTC) said, "We plan to strictly sanction unfair practices that restrict price competition in the market and cause consumer harm."