The Korea Fair Trade Commission uncovered collusion by seven flour manufacturing and sales companies and imposed the largest-ever penalty surcharge. In response, the milling industry apologized, saying it would work to prevent a recurrence.
On the 20th, the Korea Fair Trade Commission (FTC) said it imposed a total penalty surcharge of 671.045 billion won along with corrective orders for collusion by seven milling companies over about six years from Nov. 2019 to Oct. 2025.
The companies include Daehan Flour Mills, CJ CheilJedang, Sajo Dongaone, Samyang Corporation, Daesun Flour Mills, Samhwa Flour Mills, and Hantop. Based on 2024 sales, they hold an 87.7% share of the domestic B2B (business-to-business) flour sales market.
In response, CJ CheilJedang said, "We deeply apologize for causing concern to the public," adding, "We will restore public trust by contributing to the creation of a fair food industry ecosystem going forward." It added, "We withdrew from the milling association to fundamentally block any possibility of contact with competitors."
Samyang Corporation said, "As a company with limited standing and influence in the relevant market, we take seriously that there were shortcomings in some B2B (business-to-business) sales practices and our internal management system."
It continued, "To prevent a recurrence, we are thoroughly reexamining our internal standards and decision-making procedures across pricing policy and overall sales activities," adding, "We will do our utmost to strengthen our compliance system and prevent any repeat of such incidents."
That day, the Korea Fair Trade Commission (FTC) issued corrective orders, including orders to prohibit future legal violations and to independently reset prices, and imposed a penalty surcharge on the seven milling companies. The penalty surcharge by company is 183.097 billion won for Sajo Dongaone, 179.273 billion won for Daehan Flour Mills, 131.701 billion won for CJ CheilJedang, 94.787 billion won for Samyang Corporation, 38.448 billion won for Daesun Flour Mills, 24.291 billion won for Hantop, and 19.448 billion won for Samhwa Flour Mills.
In January, the Korea Fair Trade Commission (FTC) also filed complaints against a total of 14 executives and employees at the seven milling companies who took part in the collusion, following a request to refer the case to prosecutors.
Earlier, when allegations of flour price collusion emerged, the entire board of the milling association resigned and companies cut product prices. CJ CheilJedang lowered restaurant-use flour prices by 4% in January, and in February reduced prices for all restaurant-use and consumer products by up to 6%.
Samyang Corporation also cut consumer (B2C) and restaurant (B2B) sugar and flour prices by an average of 4% to 6% in early February.
Sajo Dongaone reduced prices for premium Chinese-cuisine flour and all-purpose flour used as ingredients for zhajiangmyeon, and for pastry and bread-making ingredients labeled soft 1st grade and hard 1st grade, by up to 6%, an average of 5.9%. Daehan Flour Mills also lowered prices for some flour products by an average of 4.6%.