408 Billion Won Fine Bomb... How the Sugar “Big Three” Cartel Plundered Ordinary Consumers’ Wallets

Tightly Knit “Pyramid Meetings” from Division Heads to Team Leaders
Three Firms Jointly Pressured Clients That Refused Price Hikes
Collusion Continued Even After the Fair Trade Commission Took Notice in 2024

The recent imposition by the Korea Fair Trade Commission of 408.3 billion won in administrative fines on the so-called “Big Three” sugar companies in Korea — CJ Cheiljedang, Samyang Corporation, and Daehan Jedang, which together control more than 90% of the domestic sugar market — is being seen not merely as a sanction, but as a declaration of all-out war against a “people-plundering cartel.” Behind this “fine bomb,” which is the second-largest collusion case on record and the largest ever in terms of the average amount imposed per company, lies a meticulous and audacious scheme in which companies exploited the suffering of ordinary people as an opportunity for profit from within the trade barriers erected by the state.

From division heads to team leaders in a “pyramid-style” secret liaison... “Dongseo belongs to CJ, Orion to Samyang Corporation”

KakaoTalk conversation with a Daehan Sugar representative. Korea Fair Trade Commission.

The methods revealed by the Fair Trade Commission’s investigation were as tightly knit as a military operation. From February 2021 to April 2025, the companies coordinated prices and the timing of price hikes in an organized manner on eight separate occasions. Agreements moved down the hierarchy. After the presidents and division heads met to establish the broad framework for price increases and a “three-company cooperation system,” sales executives and team leaders took the baton and met frequently. In particular, front-line sales team leaders met as many as nine times a month to fine-tune detailed implementation plans.

The core tactic was “controlling the division of customers.” The three companies divided roles so that the firm with the highest share for each buyer would take the lead in negotiations. For example, negotiations with Dongseo were handled by CJ Cheiljedang, Orion by Samyang Corporation, and Namyang Dairy Products by Daehan Jedang. They shared the progress of negotiations in real time, and if any buyer demanded a price cut, they responded jointly to build a defense. Chairman Joo Byunggi of the Fair Trade Commission criticized this as “predatory collusion that ruthlessly passed on cost increases while delaying the reflection of cost decreases to maximize profits.”

“State protection turned into a tool for private gain”... Brazen disregard for the 2007 sanctions

What particularly enrages the Fair Trade Commission in this case is the unique nature of the sugar industry. Sugar is an industry in which the state has erected trade barriers, including a high tariff of 30%, to protect producers of food raw materials, thereby guaranteeing stable demand for domestic sugar refiners. However, the sugar companies used these national benefits as fertile ground for collusion. The scale of collusion by the three companies uncovered by the Commission amounts to 3.2884 trillion won, and the basis for imposing fines was set at 15% of the related sales. Before the Commission’s announcement, the prosecutors who investigated the case had already stated that sugar prices rose by up to 66.7% after the collusion.

Despite having a “record” of being sanctioned in 2007 for the same charges, the companies made no changes to their management practices. Even after the Fair Trade Commission launched its investigation in March 2024, they continued the collusion for more than a year, shared information about the Commission’s investigation, and even crafted joint response scenarios, displaying deceptive behavior. Chairman Joo lamented, “I felt deep disappointment at the fact that leading Korean companies have not even provided basic education to their employees that collusion can push a company into crisis.”

“Rule-breakers must be weeded out”... Major overhaul of the system to cut off “collusion gains” at the source

Ju Byeonggi, Chairman of the Fair Trade Commission, is briefing on the case regarding unfair collusive conduct by three sugar manufacturers and sellers.

Through this action, Chairman Joo sent an uncompromising warning message to the market. Addressing arguments in some quarters about a “corporate crisis,” he drew a clear line, saying, “It is not desirable to weigh sanctions based on law and principle against corporate sustainability.” He instead maintained a hard-line stance, stating, “Companies that break the rules and exploit others must be weeded out so that innovative companies have space to succeed.”

Accordingly, the Fair Trade Commission is embarking on a major institutional overhaul to ensure that the losses from punishment overwhelmingly exceed any gains from collusion. First, it will push for legislative amendments to sharply raise the statutory ceiling on fines for collusion from the current 20% of sales to 30%. The judgment is that if companies can enjoy unjust gains of 30% but face sanctions of only 15–20%, the chain of collusion cannot be broken.

In addition, within three months the Commission plans to revise enforcement decrees and notifications to expand the weight of enhanced penalties for repeat violations, which currently stands at around 10%, to 50%, in line with advanced jurisdictions such as the European Union (EU). At the same time, it intends to move away from the past approach that relied on the leniency (self-reporting reduction) system, instead strengthening the Commission’s own ex officio investigation and economic analysis capabilities, and bolstering its legal investigative powers so that companies will not even dare to consider collusion.

Following sugar, the Fair Trade Commission also plans to deploy a “rapid response team” and take stern action on other livelihood-related items currently under investigation, such as flour, starch sugar, eggs, and pork. In particular, the flour collusion case is scheduled to be brought before the deliberation committee in February, signaling additional strikes against the “food cartel.”

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