SEOUL, March 11 (AJP) - South Korea’s Fair Trade Commission has opened an inquiry into Ilyang Pharmaceutical’s sudden withdrawal of health supplements from Daiso stores, amid concerns that the country’s pharmacists’ association may have played a role in the decision, industry sources said Tuesday.
The antitrust regulator is investigating whether the association’s involvement, if confirmed, constitutes a violation of fair trade laws.
Ilyang Pharmaceutical introduced nine types of health supplements at Daiso on Feb. 24, packaging them in smaller, one-month portions—significantly less than the conventional three-to-six-month supply—and pricing them between 3,000 and 5,000 won ($2.30–$3.85), roughly one-sixth the cost of similar products sold through the company’s own distribution channels.
Daewoong Pharmaceutical and Chong Kun Dang Health also launched similarly priced supplements at Daiso, reportedly reducing costs by limiting secondary ingredients and streamlining packaging.
While consumers welcomed the affordable products, pharmacies reacted strongly against the move, threatening product returns and boycotts.
In response, Kwon Young-hee, the president-elect of the Korean Pharmaceutical Association, met with executives from the three pharmaceutical companies on Feb. 26 and 27 to demand changes. Just five days after the launch, Ilyang pulled its products from Daiso shelves on Feb. 28, prompting consumer complaints over what they viewed as interference with purchasing choices.
Critics have suggested that the pharmacists’ actions may run afoul of Article 45 of the Fair Trade Act, which prohibits businesses from unfairly using their market position to interfere with another company’s activities.
If pharmacist groups exerted pressure to block Ilyang’s sales at Daiso, such actions could be deemed an abuse of trading power, according to industry observers. The allegations have prompted a review by South Korean fair trade authorities.
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