'Emart Everyday' Fined 582 Million Won for Shifting Remaining Direct Purchase Products to Suppliers

Fair Trade Commission Sanction Decision

Late Delivery of Contracts and Unfair Use of Dispatched Workers
Emart Everyday: "Due to Past System Deficiencies... Prevention Measures Already Improved"

[Sejong=Asia Economy Reporter Joo Sang-don] Emart Everyday, which directly purchased so-called seasonal products such as sunscreen and iceboxes and then forced leftover products onto suppliers, has been sanctioned by the Fair Trade Commission.

On the 14th, the Fair Trade Commission announced that it decided to impose a corrective order and a fine of 582 million KRW on Emart Everyday for violating the Large-scale Distribution Business Act.

According to the Fair Trade Commission, Emart Everyday unfairly returned 156,929 seasonal products of 146 items supplied by 15 suppliers through direct purchase transactions from January 2015 to May 2018.

Direct purchase transactions refer to a transaction type where a large-scale distributor directly purchases products from suppliers and sells them, bearing the inventory risk of unsold products themselves. However, Emart Everyday did not establish specific return conditions for vacation season products such as sunscreen and sunblock, and seasonal products such as thermos bottles and iceboxes, and returned leftover products after the season at the suppliers' expense.

Additionally, Emart Everyday delivered contracts late to suppliers. From January 2015 to April 2018, Emart Everyday signed 120 new contracts with 93 suppliers and 553 renewal contracts with 356 suppliers. During this process, Emart Everyday delivered the basic transaction contracts, which clearly stated contract terms and were signed or sealed by both parties, to suppliers on average 7.8 days (new contracts) and 13.2 days (renewal contracts) after the contract date. The Large-scale Distribution Business Act requires that a written contract specifying the terms and signed or sealed by both parties be delivered immediately upon contract conclusion.

Furthermore, from January 2015 to March 2018, Emart Everyday received and used a total of 119 employees dispatched from 19 suppliers for product display work at 29 new stores and 39 renovated stores. At that time, Emart Everyday did not provide suppliers with a written agreement specifying the conditions of employee dispatch in advance and only delivered the written documents up to 77 days after the dispatched employees' work ended. This violated the Large-scale Distribution Business Act, which requires large-scale distributors to provide a written agreement specifying the detailed dispatch conditions in advance when using suppliers' employees. However, all labor costs (approximately 6 million KRW) for the 119 dispatched employees were paid.

Accordingly, the Fair Trade Commission imposed corrective orders including recurrence prevention orders, notification of legal violations to suppliers, and a fine of 582 million KRW.

An Emart Everyday official stated, "Due to some deficiencies in past system functions and unclear contract clauses, we received a fine from the Fair Trade Commission," and added, "We have already completed improvements to the system and procedures to prevent such issues from recurring."

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