Fair Trade Commission: "About 25% of Furniture, Book Publishing, and Boiler Sectors Experienced Unfair Practices"

Survey Results on Dealership Transactions in Furniture, Book Publishing, and Boiler Industries

All 3 Industries Must 'Establish Remedies for Damages When Multiple Similar Harms Occur'
Challenges Include "Increased Burden Due to Delayed Payments and Rising Interest Costs Caused by COVID-19"

[Sejong=Asia Economy Reporter Joo Sang-don] Approximately 25% of dealerships in the furniture, book publishing, and boiler industries have experienced unfair practices.

On the 20th, the Fair Trade Commission conducted a dealership transaction survey targeting the furniture, book publishing, and boiler industries (from July 7 to 31 this year) and announced the results after analysis.

According to the findings, all three industries have a high dependency on dealerships, with over 40% of total sales relying on dealerships, making dealership transactions a significant distribution method. Furniture depends on dealerships for 87.5% of sales, book publishing 64.3%, and boilers 85.7%.

The resale ratio was higher than consignment sales in all three industries: furniture at 75.3%, book publishing at 76.6%, and boilers at 98.7%. Furniture (84.9%) and boilers (93.9%) showed a high proportion of exclusive transactions, whereas book publishing had a higher proportion of non-exclusive transactions (78.1%).

In book publishing, many respondents indicated that returns are freely allowed (53.8%), while a significant number of respondents in furniture (15.4%) and boilers (27.7%) stated that returns are not permitted.

Although a high percentage in all three industries?furniture 75.3%, book publishing 74.4%, and boilers 74.2%?reported never experiencing unfair practices, detailed questions by type of behavior revealed differences among industries.

According to the Fair Trade Commission, in the furniture industry, due to the nature of the products, offline store displays for consumers are important, leading suppliers to demand specific interior designs from dealerships (49.7%) and even designate construction companies (19.8%), which may interfere with dealership management activities related to interior design. Additionally, suppliers often require dealerships to participate in promotional events (30.5%) and impose the full cost of these promotions on dealerships (28.5%), which could be considered an unfair transfer of promotional expenses.

In book publishing, following industry practices where distribution is conducted through regional general distributors (wholesale dealerships), many respondents reported that suppliers set sales territories and impose sanctions for violations (62.1%), indicating possible interference in management activities by restricting sales areas.

In the boiler industry, the highest rate of experience was with forced sales targets (19.5%). Among dealerships given sales targets (53.7%), many (34.3%) suffered disadvantages due to failure to meet these targets, which may constitute forced sales target practices.

All three industries most frequently cited the need for institutional improvements, specifically the establishment of remedies for damages when multiple similar harms occur. Challenges included increased burdens from delayed payments and rising interest costs due to the recent COVID-19 pandemic.

A Fair Trade Commission official stated, "Based on the survey results and after gathering opinions from suppliers and dealerships, we plan to establish and disclose a standard contract in October this year. Alongside this, we will conduct ex officio investigations into suspected legal violations found in the survey results to correct unfair trade practices."

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