[Edaily Reporter Kim Hyun-jae ] Employees of pork processing and sales companies have been indicted for price-fixing totaling 1.2 trillion won over the past six years. Investigative authorities determined that the companies engaged in price-fixing on more than several hundred occasions by exchanging information in advance regarding quoted prices for pork supplied to large supermarkets.

As a result of the collusion by these companies, pork prices at large supermarkets rose by at least 20%. Notably, when the Fair Trade Commission launched an investigation into the collusion, the companies even engaged in organized efforts to obstruct the investigation, such as deleting chat logs from messaging apps.

The 6th Criminal Division of the Seoul Eastern District Prosecutors’ Office (headed by Chief Prosecutor Lee Jeong-ho) announced on the 4th that it had indicted six companies—including pork processors and retailers Dodram Food and Dihers Korea (formerly CJ Corp. Feed & Care)—and 12 of their executives and employees without detention on charges of violating the Fair Trade Act. The office also stated that it had exercised its right to request the Fair Trade Commission to file charges against 12 individuals deemed to have played a particularly significant role in the collusion.

According to the prosecution, over a period of approximately 6 years and 3 months—from August 2017 to November 2023—the six companies are accused of engaging in a price-fixing scheme worth approximately 1.2 trillion won by exchanging information on quoted prices for pork supplied to E-MART Co., Ltd.(139480)or by colluding to set prices.

In August 2017, E-MART Co., Ltd. began purchasing pork after receiving price quotes from pork processing and sales companies. During this process, E-MART Co., Ltd. did not disclose the quoted prices in order to encourage price competition among the companies.

The pork processing and sales companies established a communication system among their representatives to coordinate prices. They exchanged the price quotes submitted weekly to E-MART Co., Ltd. to keep pork supply prices above a certain level. The investigation found that when circumstances such as sales events or the need to liquidate inventory arose, company representatives would contact each other individually to coordinate prices.

In particular, starting in November 2021, these companies established a secret group chat on Telegram to collectively fix supply prices, engaging in even more sophisticated price-fixing. As penalties under the Fair Trade Act were strengthened, they urged each other to “pay even more attention to security,” and it was determined that they engaged in price-fixing hundreds of times as a matter of routine.

When the Fair Trade Commission (FTC) began its on-site investigation, the companies systematically obstructed the probe by, for example, deleting messenger chat logs—which served as crucial evidence of their collusion. An investigation revealed that a member of Company A’s legal team instructed the sales team leader to “delete all records of communications with competitors and all computer files containing competitors’ price information.”

Due to these efforts to obstruct the investigation, it was revealed that a significant amount of evidence had already been lost from the companies’ offices and the mobile phones of the responsible personnel by the time the Fair Trade Commission conducted its on-site investigation and the prosecution carried out its search and seizure.

Last March, the Fair Trade Commission uncovered the collusion among these companies, imposed fines totaling 3.165 billion won, and referred the case to the prosecution. Upon receiving the referral, the prosecution uncovered the companies’ criminal activities within three months of launching its investigation.

Following the discovery of this collusion, the consumer price index for pork in 2024 rose by approximately 1.9% compared to the previous year, and wholesale pork prices also increased (from 5,134 won/kg in 2023 to 5,239 won/kg in 2024); however, the price of pork belly at large supermarkets actually fell by 25.5%. It has been confirmed that the collusion caused pork retail prices at large supermarkets to rise by at least 20%.

Pork prices at large supermarkets serve as a benchmark for general retailers and thus contribute to the overall rise in pork prices. Prosecutors determined that this case had a serious adverse impact on consumer prices.

A prosecution official stated, “We will spare no effort in pursuing these charges to eradicate price-fixing, which causes significant harm to the economy of ordinary citizens,” adding, “We will take strict action against the perpetrators who played a leading role in the price-fixing scheme and obstructed the Fair Trade Commission’s investigation.”