11 Feed Companies 'Collusion'... Supreme Court: "Structure Makes Collusion Difficult"

Fair Trade Commission imposes 74.5 billion KRW fine on Korea Feed and others for 'Unfair Joint Conduct'
Court: "Nonghyup exercised influence on feed price adjustments... structure makes collusion difficult"

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has ruled that the Fair Trade Commission's decision to impose fines on 11 feed companies for collusion should be overturned.

While it is true that the companies exchanged information over several years and shared data on feed sales prices, production, and sales volumes, it cannot be seen as having been done with the purpose or intent of collusion.

The Supreme Court's First Division (Presiding Justice Kim Seon-su) and Third Division (Presiding Justice Lee Heung-gu) confirmed the lower court ruling in favor of the companies in the appeal case filed by four companies including Daehan Feed and Harim Holdings, requesting the cancellation of the Fair Trade Commission's corrective and fine payment orders, the court announced on the 15th.

In 2015, the Fair Trade Commission detected unfair joint conduct in the livestock feed market and issued corrective orders to 10 companies, imposing a total fine of 74.598 billion KRW. The companies fined included Cargill Agri Purina (Cargill), Harim Holdings, Farmsco, Cheil Holdings, CJ CheilJedang, Daehan Sugar, Samyang Holdings, Seoul Feed, Woosung Feed, and Daehan Feed. Doosan Bio Resources was the first to voluntarily report and received a reduction in fines.

The Fair Trade Commission judged that these companies coordinated the timing and extent of price increases and decreases for compound feed for pigs, chickens, and cattle 16 times over about four years starting from October 2006. The CEOs and division heads of these companies were investigated to have regularly met at golf courses and restaurants over several years to collude on prices.

In response to the Fair Trade Commission's decision, the 10 companies filed lawsuits. The first trial at the Seoul High Court first examined the lawsuits of four companies including Daehan Feed and ruled that the Fair Trade Commission's decision should be canceled. Although the companies shared information on feed sales prices, price increase plans, and production and sales volumes over several years, it was judged that there was no explicit or implicit agreement to decide or change feed prices.

It was also considered that collusion was difficult because the NongHyup, which has a high market share in the feed market, exerted influence by adjusting prices.

The Supreme Court also agreed with the first trial's judgment. Since many employees of small and medium-sized companies and feed purchasing demand associations participated in the information exchange meetings, it was practically impossible to agree on price increases. It was pointed out that the exchange of information itself could not be seen as having the purpose or intent of collusion.

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