This article was published on March 18, 2025, at 2:37 p.m. on the ChosunBiz RM Report site.
The Fair Trade Commission is investigating allegations that Daiso, a low-cost household goods store, interfered with the sale of health supplements by the Korea Pharmaceutical Association, which has become embroiled in a 'bullying' controversy. The pharmaceutical industry welcomed the opportunity to expand its distribution network away from pressure from the association.
On the 13th and 14th, the Fair Trade Commission dispatched researchers to the Korea Pharmaceutical Association in Seocho District, Seoul, to conduct on-site investigations related to the alleged violation of the Fair Trade Act. The researchers reportedly conducted intensive, seven-hour investigations into whether the association exerted pressure on pharmaceutical companies that supplied health supplements to Daiso.
The key issue of this investigation is whether the Korea Pharmaceutical Association pressured IL-YANG PHARM, Chong Kun Dang, and Daewoong Pharmaceutical to withdraw from the health supplement business at Daiso, and whether it encouraged pharmacists to engage in a boycott to achieve this goal. Following the decision on the 28th of last month to withdraw Daiso just five days after IL-YANG PHARM started selling nine health supplements, suspicions arose that there was pressure from the association.
According to industry sources, there is confirmation that the association pressured pharmaceutical companies to withdraw from Daiso. Representatives from the pharmaceutical companies noted that 'the Korea Pharmaceutical Association requested individual meetings with each company, and it is true that meetings took place.' A representative from one pharmaceutical company, who requested anonymity, stated, 'The association bluntly stated that we should pull products from Daiso and said, 'This will complicate our relationship.'' He added, 'I understand they wanted to meet again several more times after that.'
The Fair Trade Commission stated it cannot provide detailed information about the investigation at this time. A member of the Fair Trade Commission's service cartel investigation team said, 'We are reviewing the materials collected following the on-site investigation.'
The Korea Pharmaceutical Association initially opposed the sale of low-cost health supplements at Daiso, arguing that it could create the misconception that pharmacies have been overcharging customers. However, as some pharmacists began to advocate for a boycott against pharmaceutical companies entering Daiso, public sentiment deteriorated, escalating the situation into allegations of bullying against the pharmacist organization.
The Korean Consumer Agency Alliance issued a statement on the 7th stating, 'Since health supplements are not pharmaceuticals, consumers have the right to purchase freely,' and emphasized that 'the restriction of distribution under pressure from a specific organization undermines fair market order.'
The pharmaceutical industry expects that the Fair Trade Commission's investigation will become a new opportunity. If allegations that the Korea Pharmaceutical Association exerted pressure and engaged in bullying against pharmaceutical companies are confirmed, it could potentially open more pathways for expanding distribution networks and entering Daiso.
Daewoong Pharmaceutical and Chong Kun Dang have stated they will maintain the sale of health supplements at Daiso. A representative from Daewoong Pharmaceutical said, 'Currently, the products on the market are continuing to be sold,' adding, 'We will monitor the situation.' Other pharmaceutical companies are reportedly also considering entering Daiso while keeping an eye on this matter.
As public sentiment soured over the Daiso health supplement controversy, criticism is also emerging within the association directed at its leadership. Kwon Young-hee, the association president who officially took office on the 11th, is facing this backlash less than a week into her term.
A member of the association expressed concern, saying, 'If the sale of health supplements by pharmaceutical companies expands outside pharmacies, it diminishes the differentiation and expertise of pharmacists,' and added, 'Right as the new leadership took office, the association is experiencing bullying accusations and an investigation by the Fair Trade Commission, which has tarnished the image of all pharmacists as if we were all engaging in bullying.'
This is not the first time the association has stirred controversy over pharmaceutical companies expanding their distribution networks. In 2011, the association clashed with the government and pharmaceutical companies over the sale of common household medicines in convenience stores. At that time, the association opposed it citing safety concerns, but consumer and civic groups criticized it for exerting pressure on the Ministry of Health and Welfare and the pharmaceutical industry. Ultimately, following an amendment to the Pharmaceutical Affairs Act in 2012, some household medicines, including Bacchus energy drinks, liquid digestive aids, and fever-reducing painkillers, began being sold in convenience stores starting November 15 of that year.