Finance Ministry Speaks on 'GeoYoung Favoritism' Controversy: "For Tracking Management and Preventing Excessive Profits... Taking 100~200 Won Per Unit"

On the 6th, citizens are purchasing masks at a pharmacy near Jongno 5-ga, Seoul. From this day forward, a duplicate purchase verification system has been established at pharmacies nationwide, requiring presentation of an ID to buy masks. The purchase limit per person has been reduced from 5 masks to 2 masks per person. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kim Hyunjung] The government explained that the reason for selecting Geo Young and Baekje Pharmaceuticals as official mask distribution companies was "to enable tracking management and prevent hoarding and profiteering." This explanation came in response to repeated issues raised by some media outlets and SNS, which claimed that these companies were given exclusive privileges and questioned the background behind it.

On the 9th, the Ministry of Strategy and Finance, the Ministry of Food and Drug Safety, and the Public Procurement Service stated that the selection of Geo Young and Baekje Pharmaceuticals as distribution channels for official sales points was "because management and distribution by dedicated companies is efficient." They also explained, "Exclusive supply rights were not granted to pharmacy distribution companies, and considering the efficiency of the distribution process, four public and private companies and institutions are cooperating to promote official supply."

In fact, with about 23,000 pharmacies operating nationwide, Geo Young directly trades with about 14,000 pharmacies, accounting for about 60% of the total, which is the largest scale in the country. Additionally, after the supply stabilization measures, Geo Young expanded its trading pharmacies to about 17,000. Pharmacies not included in Geo Young’s supply network are supplied masks through Baekje Pharmaceuticals to about 5,000 locations.

The Ministry of Strategy and Finance also disclosed the prices distributed through the chain: mask manufacturers → Public Procurement Service → distribution companies (Geo Young, Baekje Pharmaceuticals) → pharmacies. According to the ministry, the Public Procurement Service set the contract price at 900 to 1,000 KRW, reflecting raw material costs and production incentives to support the difficult management conditions and production capacity of mask manufacturers. The pharmaceutical distribution companies Geo Young and Baekje Pharmaceuticals add a margin of 100 to 200 KRW and supply masks to pharmacies at 1,100 KRW. Pharmacies then add a margin of 400 KRW and sell masks to consumers at a price of 1,500 KRW.

Regarding this, the Ministry of Strategy and Finance said, "Considering the logistics and labor cost increases due to overnight deliveries and work to handle the rapidly increased volume nationwide by Geo Young and Baekje Pharmaceuticals, it is difficult to see the price as excessive." They explained, "At logistics warehouses, bulk masks received are reclassified and repackaged overnight so that pharmacies can sell two masks per person, which incurs additional logistics and labor costs."

Furthermore, they emphasized, "In the serious national situation responding to COVID-19, we hope there will be no unnecessary controversies or misunderstandings related to the supply of official masks."

This content was produced with the assistance of AI translation services.