In a significant price-fixing case involving starch sugar, which is considered the largest in South Korea's history, the first hearing for food companies and their current and former executives accused of collusion took place.
On July 7, the Seoul Central District Court held the initial trial for Daesang, CJ CheilJedang, Sajo CPK, and a total of 24 individuals, including current and former executives and officials from the Starch Sugar Association, charged with violating the Monopoly Regulation and Fair Trade Act.
During the hearing, most defendants acknowledged their charges and expressed remorse, while some denied the allegations.
Lee, the CEO of Sajo CPK, admitted to the charges and expressed deep regret. However, he stated, "I did not handle related duties before taking office as CEO in February 2024," and appealed to the court for leniency, noting his cooperation during the investigation.
CJ CheilJedang also acknowledged its involvement in the collusion and expressed remorse, but requested consideration for the relatively minor extent of its participation.
In contrast, Daesang's CEO, Lim Jeong-bae, completely denied the prosecution's allegations, asserting that he had never discussed price-fixing with representatives from Sajo CPK or CJ CheilJedang. His attorney stated, "There was no report or approval from staff regarding price determination through collusion," rejecting the prosecution's claims of executive involvement.
Some employees from Daesang admitted to participating in collusion but denied directly reporting to or receiving instructions from CEO Lim. They claimed to have only reported relevant documents to their immediate superiors, arguing that there was no conspiracy with Lim.
Additionally, Myung Mo, the head of the Starch Sugar Association, who was also indicted for facilitating meetings among food companies, generally acknowledged the charges but denied some allegations. He stated, "I admit to having facilitated meetings among company representatives, but we did not discuss specific price increases or form a consensus for joint action, and as the association head, I have no authority to set individual companies' product prices."
Earlier, the Seoul Central District Prosecutor's Office launched a large-scale investigation into the starch sugar price-fixing allegations against Daesang, Sajo CPK, and CJ CheilJedang, leading to the indictment of 21 individuals, including executives and the association head, for violating fair trade laws in April.
According to the prosecution, from July 2017 to October last year, these companies allegedly agreed on the price fluctuations and timing of price increases for domestic starch sugar and its byproducts, essential raw materials for various processed foods like snacks, beverages, and dairy products.
The collusion involved a market size of approximately 10.152 trillion won, marking it as the largest price-fixing case in South Korea's food industry history. As a result of this widespread collusion, domestic starch prices surged by up to 73.4%, and sugar prices increased by up to 63.8%, contributing to rising prices of processed foods during a period of high inflation.
Furthermore, the Fair Trade Commission announced it would impose a total fine of 747.6 billion won for the collusion, surpassing the 671 billion won fine imposed on seven flour milling companies for price-fixing in May.
After concluding the hearing, the court decided to hold another preparatory hearing on August 25 at 10 a.m., considering that the defendants' evidence submissions were not fully organized.
* This article has been translated by AI.
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