The Fair Trade Commission (FTC) announced on August 9 that it has issued a corrective order and imposed a fine of 462 million won on Nonghyup Hanaro Yutong Co. for unfairly receiving new-product entry allowances and other violations.

According to the investigation, Nonghyup Hanaro Yutong, which operates Nonghyup Hanaro Mart, collected a total of 302.36 million won in "new product entry allowances" from 43 suppliers between February and November 2021 in exchange for stocking 187 items that did not qualify as new products.

The Large-Scale Retail Business Act in principle prohibits large-scale retailers from receiving economic benefits such as money or goods from suppliers without justifiable reasons.

However, the law stipulates that retailers may receive sales allowances if they are agreed upon in advance with suppliers in the annual basic transaction contract.

Even in such cases, sales allowances must not exceed a reasonably accepted range.

Nonghyup Hanaro Yutong set the criteria for new products in 2021 based on when items were newly stocked in its own Hanaro Mart stores, regardless of their actual market release dates, and specified that it could collect an entry allowance equivalent to 10 percent of the supply value for six months thereafter.

Consequently, Nonghyup Hanaro Yutong collected new product entry allowances from suppliers even for products that had been released anywhere from over six months to eight years and nine months prior.

According to the FTC's "Guidelines on the Review of Unfairness of Sales Allowances," new products should in principle be limited to those released within six months, taking industry trade practices into account, which the FTC explained was violated in this case.

In addition, it was revealed that from April 2021 to January 2024, Nonghyup Hanaro Yutong received 43 promotional staff dispatched from 10 suppliers across 11 instances to work at its business sites without signing prior written agreements on the dispatch conditions.

Nonghyup Hanaro Yutong was also accused of delivering contract documents an average of 30 days late while concluding 863 contracts with 426 suppliers and tenants between January 2021 and July 2024.

Contract documents are official paperwork specifying contract terms such as transaction types, items, and periods, bearing the signatures or names and seals of both parties.

Under the Large-Scale Retail Business Act, dispatch agreements must precede the actual dispatch and work of promotional staff, and contract documents must be issued immediately upon concluding a contract.

Regarding this sanction, the FTC evaluated that it holds significance by clearly establishing that the practice of collecting sales allowances beyond a reasonable scope is illegal.

An FTC official stated, "We will continue to intensively monitor habitual practices rooted in the retail market."

(Photo: Yonhap News)