It appears that food companies that were sanctioned by or are facing sanctions from the Korea Fair Trade Commission over alleged price collusion on sugar, flour and starch sugar saw their results worsen. Some corporations swung to a net loss despite posting an operating profit.
According to the Financial Supervisory Service's electronic disclosure system on the 2nd, major food companies including CJ CheilJedang, Samyang Corporation, Daesang, TS Corporation, Daehan Flour Mills and Sajo Dongaone saw their results worsen last year, with several recording net losses. The recognition of Korea Fair Trade Commission (FTC) penalty surcharges and expected amounts as provisions in their results had a partial impact.
On Feb. 12, the Korea Fair Trade Commission (FTC) decided to impose a total 408.3 billion won in penalty surcharges on CJ CheilJedang, Samyang Corporation, TS Corporation and others on suspicion of colluding on the timing and amount of sugar price adjustments from 2021 to 2025. By company, the penalty surcharges are 150.7 billion won for CJ CheilJedang, 130.3 billion won for Samyang Corporation and 127.4 billion won for TS Corporation. CJ CheilJedang's amount was lowered to 138.3 billion won as the sales subject to collusion were adjusted.
Subsequent investigations also covered flour and starch sugar. Regarding flour collusion, Korea Fair Trade Commission (FTC) examiners determined that seven companies engaged in collusion to allocate prices and volumes over about six years from Nov. 2019 to Oct. 2025. The related sales affected by the case were estimated at 5.8 trillion won. On starch sugar collusion, four companies—Daesang, Sajo CPK, Samyang Corporation and CJ CheilJedang—were found to have repeatedly and systematically colluded on starch sugar selling prices for seven years and six months from May 2018 to Oct. 2025. The affected sales amount to 6.2 trillion won.
CJ CheilJedang posted 27.3426 trillion won in revenue and 1.2336 trillion won in operating profit last year but swung to a net loss of 417 billion won. It returned to the red one year after a 345.9 billion won net profit in 2024. Revenue inched up from 27.2397 trillion won the previous year, but operating profit (1.4521 trillion won in 2024) fell, and the reflection of the penalty surcharge appears to have severely damaged profitability. CJ CheilJedang included the 138.3 billion won penalty surcharge imposed on the 12th by the Korea Fair Trade Commission for inter-corporation sugar-trade collusion under "current other provisions."
At the 19th annual shareholders meeting held on the 24th of last month, CJ CheilJedang apologized to shareholders for the deteriorating results and sugar collusion through a greeting in the name of CEO Sohn Kyung-shik. Sohn said, "We deeply apologize for causing concern," and added, "We will completely root out the wrongful practices of the past and rebuild the company's systems and culture from the ground up, while implementing strong measures to prevent recurrence."
Samyang Corporation showed a similar trend. Revenue in 2025 was 2.5626 trillion won, down from 2.6718 trillion won a year earlier, and operating profit fell from 133.5 billion won to 111.7 billion won. In particular, net income of 136.4 billion won in 2024 turned to a loss, posting a 302.3 billion won deficit last year. This reflects the sugar collusion penalty surcharge and the possibility of additional sanctions. Samyang Corporation received a finalized 130.2 billion won penalty surcharge related to sugar collusion, and additional investigations related to flour and starch sugar are underway. In its business report, Samyang Corporation reflected a total of 452 billion won in Korea Fair Trade Commission penalty surcharges as current accrued expenses and current other provisions. In addition to the sugar-related penalty surcharge, it appears to have pre-reflected expected penalty surcharges related to flour and starch sugar as other provisions.
Daesang saw revenue grow but profitability worsen at the same time. Last year's revenue hit a record high of 4.4013 trillion won, but it swung to a net loss of 303.1 billion won. The previous year it posted a net profit of 75.7 billion won. Daesang entered 375.3 billion won under "other provisions," disclosing, "We are currently under investigation by the Korea Fair Trade Commission (FTC) for unfair concerted acts and have recognized the expected penalty surcharge as a provision."
TS Corporation also increased operating profit but turned to a net loss. Last year's operating profit was 56.6 billion won, up from 37 billion won a year earlier, but it swung from a 20.5 billion won net profit in 2024 to a 60.4 billion won net loss last year. TS Corporation recorded the 127.4 billion won penalty surcharge imposed by the Korea Fair Trade Commission as other provisions. Daehan Flour Mills likewise maintained an operating profit but swung from a 48.8 billion won net profit to a 25.1 billion won net loss. Daehan Flour Mills disclosed 94.4 billion won as other provisions, saying, "In connection with the Korea Fair Trade Commission investigation, we recognized the estimated penalty surcharge as a provision."
Sajo Dongaone posted an even larger net loss. It maintained about 42.5 billion won in operating profit but recorded a net loss of 137.3 billion won. Sajo Dongaone entered 167.3 billion won as other provisions, explaining, "Other provisions represent amounts expected to be outflowed in connection with the Korea Fair Trade Commission's investigation."
This trend is highly likely to continue at Hantop, Daesun Flour Mills, Samhwa Flour Mills and other companies among those surveyed in the flour collusion probe. However, some corporations disclosed that they did not reflect provisions or found it difficult to estimate the impact because the penalty surcharges have not been finalized. Sajo CPK, implicated in the starch sugar collusion, is also expected to see greater earnings volatility depending on the size of future penalty surcharges. The Korea Flour Mills Industrial Association said at a regular general meeting on the 5th of last month that it apologized to the public for the flour price collusion raised by the recent Korea Fair Trade Commission investigation and that all members of its board would resign.
Industry officials note that the latest deterioration in results is a structural effect from recognizing accounting expenses rather than sluggish operations. Because penalty surcharges are treated as non-operating expenses, they damage net income regardless of the profitability of the core business. As a result, some corporations showed a "operating profit, net loss" earnings structure.
There are also concerns that the burden could grow further. While sugar collusion penalty surcharges have already been finalized, the final level of sanctions for flour and starch sugar has not yet been determined. Considering that the Korea Fair Trade Commission (FTC) can impose penalty surcharges of up to 20% of related sales, there remains the possibility of additional expense recognition.
A food industry official said, "Penalty surcharges can be partially adjusted through future administrative and legal procedures, and there are sectors where rulings have not yet come out, but the size of the penalty surcharges themselves makes a short-term earnings shock unavoidable," adding, "With the recent domestic market slump and prices of packaging and other raw and subsidiary materials rising amid deteriorating global conditions such as the war in Iran, the industry is facing the risk of worsening results on multiple fronts."