Fear of 'Sugarflation'... Fair Trade Commission Investigates Collusion Among Three Sugar Companies

Fair Trade Commission Conducts On-Site Investigation of CJ CheilJedang, Samyang, and Daehan Sugar
90% Market Share Oligopoly in Sugar... Investigating Possible Price Collusion
Previously Fined in 2007 for Collusive Practices

Amid growing fears of 'Sugarflation' (Sugar + Inflation), the Korea Fair Trade Commission (KFTC) has begun investigating suspicions that sugar manufacturers and sellers, including CJ CheilJedang, colluded to raise prices.

According to industry sources on the 20th, the KFTC sent investigators to three major domestic sugar companies?CJ CheilJedang, Samyangsa, and Daehan Sugar?to conduct on-site inspections and secure sales-related data. The KFTC is reportedly examining whether these companies, which hold a 90% share of the domestic sugar market, conspired to increase sugar prices.

Last month, the price inflation rates of sugar and salt simultaneously reached their highest levels in a year, and on the 11th, sugar was displayed at Yangjae Hanaro Mart in Seoul. Photo by Jinhyung Kang aymsdream@

This investigation appears to be part of efforts to curb soaring prices. In particular, sugar prices surged more than 20% compared to a year ago as of last month, heightening concerns over sugarflation. When sugar prices rise sharply, prices of bread, snacks, ice cream, and other products inevitably follow suit. Accordingly, the government seems to be cracking down on the food industry as a measure to control inflation.

Since President Yoon Suk-yeol recently reviewed the price situation and stated, "If unfair practices such as collusion lead to excessive profits, we will respond strictly," there is a possibility that the KFTC will scrutinize the food industry's oligopolistic market more closely going forward.

The three sugar companies under investigation were previously caught for collusion in 2007, when the KFTC imposed fines totaling approximately 51.1 billion KRW. At that time, the KFTC uncovered that these companies colluded on product shipment volumes and prices over about 15 years, from 1991 to 2005.

Meanwhile, major flour manufacturers such as CJ CheilJedang, Samyangsa, and Daehan Milling are lowering prices to reflect the decreased cost of imported wheat. Market leader CJ CheilJedang plans to reduce prices of consumer flour products by a minimum of 3.2% to a maximum of 10%, starting from the 1st of next month.

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