Prosecutors have sent a large number of current and former employees, including the CEOs of CJ CheilJedang, Daesang and Sajo CPK, to trial on charges of colluding to fix starch sugar prices worth about 10 trillion won.
The Seoul Central District Prosecutors' Office Fair Trade Investigation Division (Director General Na Hee-seok) said on the 23rd that it indicted three starch sugar companies, including CJ CheilJedang, Daesang and Sajo CPK, along with 21 current and former employees including the CEOs, and the head of the starch sugar association, totaling 25 people, on charges of violating the Fair Trade Act. Starch sugar refers to corn syrup, fructose and oligosaccharides made from starch. It is a key materials and supplies used in snacks, beverages and dairy products.
According to prosecutors, the companies are suspected of jointly and unfairly restricting competition with other businesses by agreeing on the timing and range of price changes for starch sugar and its by-products for eight years from July 2017 to Oct. 2025.
The collusion scale identified by prosecutors alone amounts to 10.1520 trillion won. That is larger than the combined size of the sugar price-fixing case (3.2715 trillion won), the KEPCO bid-rigging case (about 677.6 billion won), and the flour price-fixing case (5.9913 trillion won) that prosecutors have recently sent to trial in succession.
The investigation found that the starch sugar corporations engaged in collusion meticulously and systematically. To conceal the collusion, they varied the proposed price increase or decrease range by transaction counterpart for each company and set different times for sending official notices.
It was found that for large transaction counterparts that purchase starch sugar through procurement bids, the corporations agreed in advance on the winning company and the bid price so that the jointly determined price plan could be reflected while maintaining each company's market share. The affected transaction counterparts were major domestic beverage companies Seoul Milk and Korea Yakult, ramen company Nongshim, liquor companies Hitejinro and Oriental Brewery, and steel company POSCO. Starch sugar is also used as an adhesive and coating material in the paper and steel industries.
The corporations also colluded on the prices of by-products generated in the process of producing starch sugar by jointly deciding the prices every month and then notifying transaction counterparts of those prices.
Prosecutors began the investigation in Feb. this year. On Feb. 23, they raided four starch sugar companies—CJ CheilJedang, Samyang Corporation, Daesang and Sajo CPK—and expanded the probe by exercising the right to request a complaint from the Korea Fair Trade Commission.
On Mar. 31, prosecutors sought arrest warrants for three people—Kim, a Deputy Minister-level division head, a person surnamed Lim who is the CEO at Daesang, and a person surnamed Lee who is the CEO at Sajo CPK—on charges of violating the Fair Trade Act, arrested Kim, and indicted Kim on the 16th.
Meanwhile, prosecutors have recently accelerated investigations into price-fixing cases for essential goods directly tied to the cost of living. Through Feb., prosecutors sent 52 employees of companies involved in collusion worth about 10 trillion won in the flour, sugar and electricity sectors to trial.