Korea Fair Trade Commission Fines Jeju Liquor Wholesalers Group for Price, Client Controls

Jeju’s liquor wholesale market has long operated under practices that controlled prices and customer accounts, and competition authorities have now sanctioned the trade group at the center of those rules. 

The Korea Fair Trade Commission said Saturday it decided to issue corrective orders and fine the Jeju Liquor Wholesalers Association 256 million won for restricting competition among member companies by blocking efforts to win customers and by limiting discounts on selling prices.

According to the commission, the association has barred members since 2018 from taking over existing customer accounts under rules titled “Implementation Rules for the Transaction Normalization Council.” It repeatedly shared the policy through meetings, and in 2023 it introduced separate guidelines — “Guidelines for Dispute Mediation Among Members of the Liquor Transaction Cleanup Committee and Measures for Violations” — spelling out sanctions for violations.

The association also curbed price competition by setting benchmarks it called “normal price” and “survival price” and pressuring members not to supply liquor below those levels, the commission said. In 2020, it set a rule that, for transactions without support, discounts must stay within 10% of the normal price — effectively blocking members from using price competition to secure customers.

The commission imposed a 22 million won fine for restricting competition to win customers and 234 million won for limiting selling prices. It said the impact was broad because most Jeju wholesalers belong to the association.

Jeju has only 22 comprehensive liquor wholesale licenses, about 2% of the national total of 1,100, the commission said, making the market especially susceptible to association-led rules. 

The commission ordered the association to stop similar conduct and to notify member companies of the corrective order.

A wholesaling industry official said business practices in Jeju are likely to change. “The practice of not touching each other’s accounts has effectively been maintained as an unspoken rule,” the official said, adding that “some competition on price or terms may emerge.”

A commission official said the agency expects more competition in supply prices for products such as soju and beer, which are popular with Jeju residents and domestic travelers. The official said the commission will continue monitoring collusion in markets closely tied to household prices to reduce the public’s economic burden.