Kyochon Chicken was indicted on charges of violating the Fair Trade Act for unilaterally cutting the distribution margin of a supplier of chicken-frying oil.
On Apr. 17, the Criminal Division 3 of the Seongnam Branch of the Suwon District Prosecutors' Office (headed by Director General Eom Young-uk) indicted Kyochon F&B, the headquarters of the "Kyochon Chicken" franchise, without detention on charges of violating the Fair Trade Act.
Kyochon F&B is accused of using its superior bargaining position to cut the margin of two partner companies that distribute chicken-dedicated oil between May and Dec. 2021.
Kyochon F&B is said to have reduced the distribution margin of 1,350 won per can to 0 won. When the dedicated-oil manufacturer requested a hike in the purchase price in Apr. 2021, it eliminated the margin it had guaranteed to the distributor.
As the increase was passed on to the distributors, the companies were said to have incurred losses totaling about 700 million won.
The Seongnam branch said it will respond strictly to unfair transaction practices.