There Was a Reason for Rising Chicken Prices... Fair Trade Commission Accuses Yukgye Association of Artificially Raising Chicken Meat Prices

Fair Trade Commission imposes corrective order and a fine of 1.21 billion won together

December 13, 2021, chicken meat sales counter at a large supermarket in Seoul [Image source=Yonhap News]

[Asia Economy Intern Reporter Kim Nayeon] The Korea Broiler Association has been caught by the Fair Trade Commission for artificially determining the chicken sales prices and shipment volumes of its member businesses for over nine years.

On the 17th, the Fair Trade Commission announced that it would file charges against the Broiler Association with the prosecution for violating the Fair Trade Act's prohibition on business association misconduct, and also imposed corrective orders and a fine of 1.21 billion KRW.

The Broiler Association includes all major domestic chicken manufacturers and sellers such as Harim, Allpum, Maniker, and Chamfree as its member businesses.

Previously, the Fair Trade Commission had sequentially sanctioned these member businesses of the Broiler Association for collusion on prices of parent stock, Samgye fresh meat, and broiler fresh meat. During this process, the Commission determined that the Broiler Association served as a key channel for collusion, artificially deciding chicken prices and shipment volumes.

According to the Fair Trade Commission's investigation, from June 2008 to July 2017, the Broiler Association decided on the sales prices, production volumes, shipment volumes of broiler fresh meat used in dishes such as chicken and spicy braised chicken, and the purchase volumes of broiler parent stock a total of 40 times.

Regarding sales prices, member businesses agreed to raise additional costs applied to clients such as transportation and salting fees, or restricted price discount competition among members by setting minimum discount limits and reducing discount targets.

To prevent price drops by limiting shipment volumes, they decided to freeze processed fresh meat for stockpiling and increased the purchase volumes of broiler parent stock in the broiler parent stock market to raise broiler fresh meat sales prices.

Additionally, to fundamentally limit the production volume of broiler fresh meat by member businesses, they decided to discard or reduce hatching eggs and chicks, which are key raw materials for broiler fresh meat production.

For raising the sales prices of Samgye fresh meat used in Samgyetang (ginseng chicken soup), from July 2011 to July 2017, the Broiler Association decided on the sales prices, production volumes, and shipment volumes of Samgye fresh meat a total of 17 times.

They also employed methods such as reducing the number of chicks, freezing processed fresh meat for stockpiling, and to raise the market price of parent stock (the parent chickens of broilers and Samgye), from February 2013 to February 2014, they limited the import volumes of grandparent stock (the parents of parent stock) twice or reduced existing imported grandparent stock to restrict parent stock production.

The Fair Trade Commission stated, "We will strengthen monitoring of illegal acts that increase prices in food and daily necessities sectors and burden households, and impose strong sanctions when violations are detected."

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