The Fair Trade Commission launched an on-site probe after detecting signs that some big-box retailers raised list prices right before discount events and then sold the items at a discount during the government's "agricultural and livestock products discount support program." On the surface, it looks like a discount event backed by government funds, but concerns were raised that the actual discount rate may have been reduced or consumer prices distorted.
According to the retail industry on the 16th, the Fair Trade Commission's Service Monitoring Division visited the headquarters of Emart and Lotte Mart on the 24th–25th of 4th and conducted an on-site investigation. Researchers were said to have secured related data from both companies, including price management details by promotional item.
The government's agricultural and livestock products discount support program is run by the Ministry of Agriculture, Food and Rural Affairs, which injects budget funds to stabilize grocery prices. For the items designated by the ministry, it supports discounts of up to 20% per item within a weekly per-person limit of 10,000 won (for traditional markets, a 20,000 won limit and up to 30% off).
This Fair Trade Commission investigation was launched to clarify price-padding allegations that emerged during the program's operation. According to the regular audit results of the Ministry of Agriculture, Food and Rural Affairs announced by the Board of Audit and Inspection on the 18th of 4th, price-padding practices by big-box retailers were found in 42% of all items examined. For example, one big-box retailer raised the price of spinach by 33.8% right before the event and then sold it at a discount over Nov. and Dec. 2023.
Rep. Cho Kyung-tae of the People Power Party cited Board of Audit and Inspection data at the ministry's National Assembly audit on the 14th of 4th and said, "The Ministry of Agriculture, Food and Rural Affairs ran the agricultural and livestock products discount support program, which has a budget of 228 billion won, loosely and wasted taxes as a favor to large corporations."
The Fair Trade Commission believes this pricing method could mislead consumers into thinking there is a greater discount effect than there actually is, and is reviewing potential violations of the Act on Fair Labeling and Advertising. If violations are confirmed, sanctions such as corrective orders or a penalty surcharge are expected to follow. A Fair Trade Commission official said, "We cannot explain matters under investigation." Emart and Lotte Mart said, "We will cooperate faithfully with the investigation."