[One Year of the Lee Jaemyung Administration] KFTC Uncovers Consecutive 20 Trillion Won Mega Cartels... Deflates Sugar and Ramen Prices

Strong Crackdown on Cartels Harming Consumers
As Collusion Ends, Prices for Everyday Goods Drop Across the Board
Sanctions Strengthened, Including 20-Fold Increase in Minimum Fines

Since the launch of the current administration, the Korea Fair Trade Commission (KFTC) has taken unprecedented action against large-scale collusion that undermines people's livelihoods, which has played a significant role in stabilizing consumer prices. The KFTC has been recognized for targeting deeply rooted collusion in processed food and essential goods markets—sectors closely tied to everyday life—resulting in tangible price reductions.

On May 20, the KFTC presented its "Key Achievements Report for the First Anniversary of the Citizens’ Government" at the Cabinet meeting. Over the past year, the KFTC detected and imposed sanctions on large-scale collusion cases worth a total of 20 trillion won, which had disrupted market order and increased the financial burden on the public.

Collusion in Sugar and Printing Paper Markets Broken Up… Sequential Sanctions on Mega Cartels

The KFTC focused on dismantling raw material cartels where dominant conglomerates had long maintained monopolistic practices. It has already completed sanctions on chronic collusion in the sugar market (worth 3.2 trillion won, with fines totaling 396 billion won) and the printing paper market (worth 4 trillion won, with fines totaling 338.3 billion won). The commission also uncovered and penalized collusion in the fresh food sector, such as pork (fines of 3.16 billion won) and eggs (fines of 590 million won), both of which are staples in Korean households.

The KFTC’s strict enforcement reached its peak with the flour collusion case (worth 5.8 trillion won), imposing a record-high fine of 671 billion won and issuing an independent price adjustment order. The commission is also swiftly wrapping up the ongoing review and final disposition of the high-fructose corn syrup collusion case (worth 6.2 trillion won). Its stated goal is to eradicate monopolistic practices across the entire raw materials market and restore genuine market competition.

"Get Caught and You're Finished"… Minimum Fine for Collusion Raised by Up to 20 Times

Behind the KFTC’s ability to repeatedly uncover mega-cartels lies a robust legal enforcement infrastructure. To maximize the deterrent effect against cartels, in April this year, the KFTC overhauled its system, raising the minimum fine rate for collusion from 0.5% to 10%—a twentyfold increase.

Additionally, in February, the commission proposed a bill to raise the maximum fine rate from 20% to 30%, a 1.5-fold increase, and is currently working to get it passed in the National Assembly. The aim is to raise the cost of getting caught for collusion to astronomical levels, far outweighing any illicit profits, thereby fundamentally eliminating incentives for such behavior.

The KFTC’s sweeping crackdown has led to dramatic price drops in everyday consumer goods. As monopolistic structures were dismantled and competition revived, supply prices for raw materials declined across the board: sugar by up to 26.5%, high-fructose corn syrup by up to 20.5%, and flour by up to 8.1%.

With the stabilization of raw material prices, the inflated prices of processed foods—felt daily by ordinary citizens—are also falling like dominoes. Notably, the price of instant noodles dropped by as much as 14.6%, ice cream by up to 13.4%, and bread by up to 6%, resulting in substantial relief for consumers.

Meanwhile, the KFTC is also focused on strengthening the rights and bargaining power of economically vulnerable groups. It has institutionalized collective bargaining rights for franchisees and expanded the price adjustment system for subcontractors to include the energy sector. Furthermore, the commission is moving to exempt collective bargaining by SMEs and small business owners from anti-collusion regulations, with plans to report this initiative to the Cabinet soon.

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