Fair Trade Commission: "Homeplus Unfairly Passes Promotion Costs to Suppliers... Fine of 470 Million KRW"

[Sejong=Asia Economy Reporter Joo Sang-don] Homeplus was found to have unfairly imposed approximately 720 million KRW in promotional costs on suppliers, leading the Fair Trade Commission to decide on imposing a fine.

On the 5th, the Fair Trade Commission announced that it would issue a corrective order and impose a fine of 468 million KRW for Homeplus's violation of the Large-scale Distribution Business Act.

According to the Fair Trade Commission, Homeplus conducted 166 promotional events such as various discount campaigns from January to December 2017 to boost sales, but failed to establish prior agreements on promotional cost burdens with suppliers or delayed the agreements for up to 25 days. In this process, Homeplus imposed approximately 720 million KRW in promotional costs on 55 suppliers, including Lock&Lock and Ssangbangwool.

Accordingly, the Fair Trade Commission ordered corrective measures including a recurrence prevention order, notification of the violation to suppliers, and imposed a fine of 468 million KRW.

A Fair Trade Commission official stated, "This case serves as a warning to the distribution industry about the importance of the written agreement principle, which is one of the key features of the Large-scale Distribution Business Act," adding, "Through continuous monitoring of not only the unfairness of transaction content but also compliance with formal requirements such as the written agreement principle in transactions between large-scale distributors and suppliers, we plan to encourage both parties to develop a mutually complementary relationship on an equal footing."

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