Six pork suppliers indicted over alleged price-fixing scheme
Prosecutors say suppliers colluded for years to raise pork prices at Emart by at least 20 percent, and also coordinated efforts to try to delete the evidence.
People shop for pork belly at a major supermarket in Seoul on July 21.YONHAP
Six pork suppliers and 12 employees have been indicted on charges of colluding for more than six years to inflateretail pork prices by at least 20 percent, according to prosecutors on Tuesday.
The Seoul Eastern District Prosecutors’ Office said that the companies, including local major pork wholesaler Dodram Food, were indicted for violating the Fair Trade Act by colluding on pork prices supplied to discount retailerEmart between August 2017 and November 2023.
The Fair Trade Act provision criminalizing the exchange of price information took effect in December 2021, so the criminal indictments cover only conduct that occurred after the provision came into force.
Prosecutors launched the investigation in April after requesting that the Fair Trade Commission (FTC) file a criminal complaint over the suspected cartel.
The investigation found that all suppliers providing pork to Emart during the period agreed in advance on quotation prices before submitting bids and exchanged pricing information on a weekly basis. The purchasing price that Emart had paid for the indicted companies totaled 1.2 trillion won ($837.5 million).
Emartstopped disclosing suppliers' quotation prices in August 2017 to encourage price competition, according to prosecutors. The suppliers then began sharing the information among themselves to keep supply prices above a certain level.
Investigators also found that the companies intentionally submitted bids with only slight price differences to avoid raising suspicion. When special circumstances such as promotional events or inventory clearance arose, they allegedly contacted one another separately to coordinate prices. Beginning in November 2021, they also operated a private Telegram group chat room to align supply prices.
Employees at the companies were found to have systematically deleted evidence, including messenger conversations after theFTClaunched an on-site inspection into the suspected collusion.
People shop at an Emart in Seoul.EMART
At some companies, legal compliance staff instructed employees to delete electronic records, prosecutors said. Prosecutors identified four people as leading the effort and indicted them for obstructing the investigation.
Prosecutors concluded that the alleged cartel directly affected the increase of retail pork prices at major supermarkets.
Since the cartel was uncovered, renewed competition among suppliers drove supermarket pork belly prices down 25.5 percent from a year earlier, although wholesale pork prices rose from 5,134 won per kilogram ($1.62 per pound) in 2023 to 5,239 won per kilogram in 2024.
Prosecutors said retail pork prices at major supermarkets had been inflated by at least 20 percent because of the collusion before it was uncovered, based on the findings.
“We will continue to respond aggressively, in accordance with the law and established principles, to violations of the Fair Trade Act that undermine fair competition and disrupt the national economy,” the prosecutors' office said.
BY JEONG JAE-HONG [shin.woojin@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
