Prosecutors Indict Executives of Binggrae and Other 'Big 4' Ice Cream Companies for Price Fixing

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) on the 19th indicted four executives from the 'Big 4' companies?Binggrae, Lotte Foods, Lotte Confectionery, and Haitai Confectionery?without detention on charges including violation of the Fair Trade Act for colluding to raise ice cream prices over a long period. The Binggrae corporation was also brought to trial.

According to the prosecution, Binggrae and Lotte Foods agreed from February 2016 to October 2019 to raise sales prices by product type and to refrain from competing for retail stores. They also limited the items eligible for '2+1 promotions' conducted at convenience stores and agreed on the profit margin rates for such promotions.

The executives of the four companies were found to have prearranged the order and winning bidders in the ice cream supply bidding conducted by Hyundai Motor Company from June 2017 to May 2019, constituting bid rigging.

The Fair Trade Commission imposed fines totaling approximately 111.5 billion KRW on the four companies and reported Binggrae and Lotte Foods corporations to the prosecution after investigating the case in February. Through further investigation, the prosecution included an executive from Haitai Confectionery, who was not initially reported, and indicted four sales executives from the four companies. However, Lotte Foods was excluded from prosecution as it merged into Lotte Confectionery after the FTC report and ceased to exist as a separate entity.

This case represents the largest food price-fixing scandal to date, involving long-term collusion on ice cream prices closely related to the daily lives of citizens, ultimately leading to price inflation. The prosecution explained that according to the itemized Consumer Price Index by Statistics Korea from August to October 2017, the ice cream price index rose significantly compared to the overall price index during the period when the collusion took place.

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