An organized price-fixing scheme lasting about eight years has been uncovered in the starch and starch sugar market, a sector supplying essential sweetening ingredients for beverages, bread and snacks. Although the government even waived import tariffs to rein in consumer prices, major manufacturers raised prices behind the scenes to reap excessive profits — and now face the largest fine in the history of collusion cases.
The Fair Trade Commission (FTC) said Friday it will impose corrective orders and a combined 747.6 billion won in fines on four companies — Daesang, Sajo CPK, Samyang, and CJ CheilJedang — which together hold roughly an 80% monopoly of the domestic starch sugar market, and will refer all of the corporations to prosecutors. The fine is the largest ever in a collusion case. By company, Daesang, which has the highest market share, was hit hardest with around 280 billion won, followed by Sajo CPK (in the 190 billion won range), Samyang (in the 150 billion won range), and CJ CheilJedang (in the 120 billion won range).
According to the FTC investigation, the companies jointly planned the timing of price increases and decreases on 13 occasions over seven years and five months, from May 2018 to October 2025, through meetings at the sales division head level and regular gatherings of working-level staff, as well as a permanently open KakaoTalk group chat.
Their collusion grew especially intense as international grain prices fluctuated amid the COVID-19 pandemic and the Russia-Ukraine war. Even though the government lowered the quota tariff applied to processing corn to 0% to ease the food industry's cost burden, the companies pocketed the benefit while passing on the full cost increases to their clients. Conversely, when international grain prices stabilized, they secured unfair gains by systematically delaying price cuts or minimizing their scale. As a result, starch sugar selling prices soared by as much as 73% compared with before the collusion began, and the related sales the four companies generated during this period reached 6.0525 trillion won.
In response, the FTC issued not only fines but also an "independent price re-determination order" forcing the companies to restore prices — which had been artificially driven up by the collusion — to their original level, that is, the level before the collusion. Under this measure, the fourth such order in FTC history, the companies must mandatorily report price changes to the FTC every half-year for the next three years. Nam Dong-il, vice chairman of the FTC, explained that it was "an extraordinary measure to completely resolve the market price system distorted by long-running collusion."
The FTC's blade is expected to cut deeper into the food industry. Separately from this price-fixing action, the FTC has simultaneously launched review procedures into a "bid-rigging" case (related sales of 940 billion won), in which the winning bidder and bidding prices were prearranged in tenders placed by seven major food companies, and a "byproduct price-fixing" case (related sales of 1.55 trillion won), in which the prices of feed raw materials such as protein skin were controlled.
The related sales in these follow-up cases alone amount to 2.5 trillion won, and if the maximum statutory ceiling fine of 20% is imposed at a future plenary session, additional fines alone could approach up to 500 billion won. As a result, the total fines that major food companies will pay over this starch sugar affair could exceed 1.2 trillion won for the first time based on a single product category. The final decision on sanctions and the scale of fines will be confirmed after a future plenary session review.
