Prosecution Cracks Down on 10 Trillion Won Starch Syrup Cartel, Indicts Daesang, Sajo, and CJ CheilJedang En Masse

Three Corporations and 22 Current and Former Executives Indicted
Largest Collusion Case Ever in the Food Industry
Advance Agreements on Timing and Magnitude of Price Increases
Soaring Consumer Prices and Enormous Profits

The prosecution has brought a large number of starch syrup manufacturers, including Daesang, Sajo CPK, and CJ CheilJedang, as well as 25 former and current executives and CEOs, to trial in connection with the so-called 10 trillion won "starch syrup price-fixing" case.

The Fair Trade Investigation Department of the Seoul Central District Prosecutors' Office (headed by Chief Prosecutor Na Hee-seok) announced on April 23 that it had indicted three corporations—Daesang, Sajo CPK, and CJ CheilJedang, which hold an oligopoly in the domestic starch syrup market—as well as 22 former and current executives from these companies, totaling 25 individuals, on charges of violating the Fair Trade Act.

Of these, one business division head at Daesang, who led the offense, was arrested and indicted on April 16, while the remaining 24 individuals (including the three corporations) were indicted without detention on this day. The former head of the Starch Syrup Association, who previously served as CEO of Daesang, was also included.

According to the prosecution, four companies, including Daesang, are accused of engaging in collusion from July 2017 to October 2025—a period of more than eight years—by fixing the prices of starch syrup and its byproducts, which are key ingredients in various processed foods, in the domestic market. The total scale of the collusion reached 10.152 trillion won. This is the largest food product price-fixing case ever, far surpassing previous cases uncovered by the prosecution, such as the flour price-fixing case (5.9913 trillion won) and the sugar price-fixing case (3.2715 trillion won).

Collusion Extended to Major Clients and Byproducts... Led to a Surge in Consumer Prices

The structure of their offense became industry-wide practice and was executed with extreme precision. The four companies first reached a basic agreement on the timing and magnitude of price adjustments for each product. To conceal the collusion and enforce the agreement with clients, each company set different levels of price increases or decreases for their clients. They also meticulously set different dates for sending out official price increase notices to their respective clients.

Collusion in bidding for large-volume buyers also took place. The companies coordinated in advance on which company would win bids and at what price, in order to maintain each company’s existing market share and reflect the jointly determined price, targeting six major clients that purchase starch syrup in bulk through bidding—Seoul Dairy Cooperative, Korea Yakult, Nongshim, OB Beer, Hite Jinro, and POSCO.

In addition, collusion extended to byproducts such as corn oil and animal feed, which are inevitably produced during the starch syrup manufacturing process. Daesang, Sajo CPK, and Samyang Corporation jointly set the price of byproducts each month and unilaterally notified their clients of the prices.

The damage caused by the collusion of these basic daily essentials led to soaring consumer prices. Compared to before the collusion, the price of starch rose by up to 73.4%, and the price of fructose products soared by up to 63.8%, even though there were factors that should have lowered raw material costs. The four starch syrup companies saw their sales rise by an average of 24.5% per year compared to before the collusion, reaping enormous profits.

Na Hee-seok, Head Prosecutor of the Fair Trade Investigation Department at the Seoul Central District Prosecutors' Office, is announcing the investigation results of the collusion case on starch syrup and byproduct prices on the 23rd at the briefing room of the Seoul High Prosecutors' Office in Seocho-gu. Photo by Yonhap News

The Prosecution Uncovered the Full Extent in Two Months..."Will Strictly Punish Offenses That Harm the Public"

The prosecution swiftly uncovered the full extent of the collusion in about two months after launching a compulsory investigation on February 23. In this investigation, the focus was not only on imposing administrative sanctions on the companies but also on holding key executives, including company CEOs, criminally liable for their direct involvement in the offenses. The prosecution exercised its right to request referrals to the Fair Trade Commission for 22 individuals whose involvement was deemed particularly serious.

The prosecution stated, "In order to eradicate chronic collusive crimes that negatively affect the prices of basic necessities, we will support the administrative sanction process, such as by submitting related materials to the Fair Trade Commission, and cooperate closely with them. We will respond strictly to ensure that individuals involved in fair trade violations that threaten and disrupt the livelihoods of ordinary citizens are subject to corresponding punishment."

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