Prosecutors indicted 11 executives and employees of CJ CheilJedang and Samyang Corporation on charges of colluding to fix sugar prices. Two executive-level officials from the two companies were indicted and detained.
Three companies that account for more than 90% of Korea's sugar market — CJ CheilJedang, Samyang Corporation, and TS Corporation — took part in the price-fixing. Because of the collusion, sugar prices rose by as much as 66.7%, jumping to a level four times the consumer price inflation rate. The collusion amounted to more than 3 trillion won.
The Seoul Central District Prosecutors' Office Fair Trade Investigation Department (Director General Na Hee-seok) on the 26th announced the results of its investigation into the sugar price-fixing case involving the three sugar refiners that oligopolize the domestic sugar market.
Prosecutors indicted and detained former CJ CheilJedang Food Korea Head (executive level) Kim Sang-ik and former Samyang Corporation CEO Choi Nak-hyun on charges of violating the Fair Trade Act. Two executives and two employees of CJ CheilJedang, and three executives and two employees of Samyang Corporation, were indicted without detention. The corporate entities of CJ CheilJedang and Samyang Corporation were also indicted.
According to prosecutors, the three sugar refiners conducted sugar price-fixing worth 327.15 billion won over four years from Feb. 2021 to Apr. this year. When the CEOs and senior executives of the three companies formed a consensus on price increases, sales executives at each company decided the magnitude and timing of price changes. They then carried out the collusion by having the Head of Team in sales share the progress of negotiations with transaction partners.
When the price of raw sugar — the materials and supplies for sugar, which is unrefined syrup concentrated after extracting juice from sugarcane — rose, the three sugar refiners swiftly raised sugar prices, but when raw sugar prices fell, they did not lower sugar prices accordingly.
The price of 1 kilogram of sugar was around 720 won before the price-fixing, but due to the collusion by the three sugar refiners, it rose 66.7% to 1,200 won in Oct. 2023. Around Apr. this year, it was 1,120 won, 55.6% higher than before the collusion. Between 2020 and 2024, sugar prices rose 59.7%, while consumer prices increased 14.2%, and food and nonalcoholic beverages rose 22.9%.
The Seoul Central District Prosecutors' Office received the case in Sep. and raided the three sugar refiners and related parties. In Oct. and Nov., it requested referrals for prosecution from the Fair Trade Commission three times. Under the Fair Trade Act, prosecutors need a referral from the Fair Trade Commission to indict a collusion case. When the commission receives a referral request from prosecutors, it is obligated to refer the case to prosecutors.
A prosecution official said, "The three sugar refiners were caught several times in the past for collusion, but penalties such as a penalty surcharge on the corporations only entrenched collusion as a chronic ill of the industry," and added, "After launching a compelled investigation, prosecutors swiftly uncovered the full picture of the organized collusion within two months."
Prosecutors plan to continue consultations, including sending materials such as the indictment to the Fair Trade Commission to support the commission's administrative sanction procedures.