Record-Breaking 747.6 Billion Won Fine Imposed for Over 7 Years of Starch and Sweetener Price-Fixing

[Anchor]

Companies that colluded for over seven years to fix the prices of starch and starch sweeteners—ingredients used across industries ranging from food products like snacks and bread to steel and printing paper—have been hit with fines. The total amount of penalties is the largest in history, exceeding 700 billion won.

Reporter Chae Heesun has the story.

[Reporter]

This is evidence of collusion secured by the Korea Fair Trade Commission (KFTC).

On the chalkboard, the companies listed how much they would raise prices for each product type, including regular starch, glucose, and starch syrup.

The KFTC announced that four companies—Daesang, Sajo CPK, Samyang Corp., and CJ CheilJedang—colluded on the prices and timing of sales to clients for starch and starch sweeteners in this manner.

Thirteen instances of collusion were confirmed between May 2018 and October of last year, with the revenue related to these collusive acts reaching approximately 6.05 trillion won.

These companies hold a combined market share of 96% for starch and 86% for starch sweeteners. Due to the nature of this large-scale capital-intensive industry, it is difficult for new competitors to enter, allowing these firms to maintain their market dominance for the past 20 years.

Although the government applied a 0% tariff quota on imported corn, the main raw material for starch sweeteners, to stabilize prices, these companies quickly raised their selling prices when international corn prices rose and minimized price reductions when costs fell.

In this way, the average selling price of starch sweeteners, which was 559 won per kilogram at the start of the collusion, surged by over 73% to 971 won by November 2022.

[Nam Dong-il / Vice Chairperson, Korea Fair Trade Commission: Despite the reduction in costs, their operating profits improved. Ultimately, the damage caused by the collusion was passed on to downstream industries, distributors, and, by extension, the final consumers.]

The KFTC imposed a total fine of 747.6 billion won on the four companies, the largest ever for a collusion case, and ordered them to report their price changes to the commission every six months for the next three years.

Furthermore, during the investigation, the KFTC uncovered suspicions of price-fixing regarding starch sweetener byproducts used for livestock feed and cooking oil, and has sent additional examiner reports to three of the companies, excluding CJ CheilJedang.

(Video reporting: Lee Jae-young | Video editing: Jo Mu-hwan | Graphics: Lee So-jung)
※ Please note: This article was translated by AI and may contain errors.