Fair Trade Commission: "Fashion Group Hyungji Shifts Shipping Costs to Dealers... Corrective Order and Fine Issued"

Sanctions on Unfair Transfer of Transportation Costs

[Sejong=Asia Economy Reporter Joo Sang-don] The Korea Fair Trade Commission announced on the 16th that it has decided to impose a corrective order and a fine of 112 million KRW on Fashion Group Hyungji Co., Ltd. for abusing its superior bargaining position to pass transportation costs onto its dealerships.

According to the Fair Trade Commission, from January 2014 to December 2019, Fashion Group Hyungji instructed dealerships storing its clothing products to transport goods to other dealerships as needed and made the dealerships bear the full transportation costs incurred.

Such actions by Fashion Group Hyungji constitute an unfair disadvantageous act by unilaterally imposing transportation costs arising from the supplier’s needs onto the dealerships.

A Fair Trade Commission official stated, "This measure is expected to contribute to enhancing the rights and interests of dealership owners by curbing the unfair passing on of transportation costs in dealership transactions going forward," adding, "The Fair Trade Commission will continue to monitor unfair trade practices not only in the clothing industry but also in other sectors, and plans to improve transaction practices particularly in the medical device and automobile sales industries."

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