Food Company CEOs Apologize for Price Collusion at Parliamentary Audit... "Pledge All-Out Efforts for Compliance Management"

Chief executive officers of major food companies fined by the Fair Trade Commission (FTC) for price collusion on flour and sugar appeared at a parliamentary audit and apologized for their collusive practices.

Kim Chan-ho, CEO of CJ CheilJedang, and Lee Woon-ik, CEO of Samyang Corporation, attended as witnesses at the parliamentary audit of the Ministry of Agriculture, Food and Rural Affairs (MAFRA) held by the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee today (the 7th).

Rep. Yoon Jun-byeong of the Democratic Party of Korea pointed out, "Looking at the FTC's official resolution and prosecution investigations, systematic collusion and cartel issues among South Korea's representative food companies have been uncovered," adding, "Sales generated through collusion amount to approximately 15 trillion won, and surcharges reach the 2 trillion won range."

CEO Kim stated, "On behalf of the company, I bow my head and apologize to the public for damaging fair competition order and failing to meet the expectations of the market and our customers."

CEO Lee also said, "I am truly sorry for failing to maintain trust even as a company supported by the government and the National Assembly," adding, "We will do our utmost in internal controls and compliance management to ensure that such incidents do not recur."

The two companies explained that they are restricting contact with competitors and strengthening internal controls to prevent recurrence.

CEO Kim said, "We withdrew from the Korea Flour Mills Industrial Association and the Korea Sugar Manufacturers Association to reduce the possibility of contact with competitors, and even when meetings with competitors are inevitably necessary, we are strictly managing them through pre- and post-reporting procedures."

He added, "We are conducting intensive training for all members and taking strong personnel actions against employees who participated in collusion."

CEO Lee also stated, "We have improved and implemented systems to ensure that collusion never happens again," adding, "We will clearly reflect employee responsibilities in service regulations and employment rules to prevent recurrence."

Rep. Yoon also questioned Minister of Agriculture, Food and Rural Affairs Song Miryung regarding MAFRA's supervisory and regulatory responsibilities.

Rep. Yoon pointed out, "I believe this is not an issue to be left solely to the FTC," adding, "MAFRA provided about 55 billion won in stabilization funds to flour milling companies and others in 2022, and also offered tariff quotas and low-interest loan benefits."

He then urged, "We must strictly review areas where oversight was inadequate and establish a system to prevent recurrence."

When Minister Song agreed while noting, "There are parts where we do not have the authority to compel," Rep. Yoon responded, "We can make it happen legislatively. Reflect on this issue and make sure it does not happen again."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.