South Korea's Fair Trade Commission has found CJ CheilJedang, Samyang and Daehan Sugar colluded on sugar prices and imposed 408.3 billion won in fines. CJ CheilJedang and Samyang apologised after the announcement and presented measures to prevent a recurrence.

Industry sources said chairman Ju Byung-ki (주병기) said on Feb. 12 the commission is issuing corrective orders, including banning illegal conduct and requiring reporting on price changes, and imposing fines on the three sugar companies. The fines by company are 150.689 billion won for CJ CheilJedang, 130.251 billion won for Samyang and 127.373 billion won for Daehan Sugar. It is the second-largest fine in a single collusion case, after 668.9 billion won imposed on six liquefied petroleum gas suppliers in 2010, the sources said.

The three sugar makers hold an 89% share; they maintained collusion by sharing information after a 2024 probe

The commission said its investigation found the three companies agreed eight times on the extent and timing of changes in sugar selling prices from February 2021 to April last year. It found indications they coordinated supply prices and when to apply them through meetings or contacts among executives by rank, including representatives, division heads and sales executives and sales team leaders, whenever raw sugar prices moved.

The companies have also previously been sanctioned on the same allegation in 2007, it said. The commission said it confirmed indications the three sugar makers repeatedly colluded even after past sanctions. It said they maintained collusion for more than a year after the commission began an investigation in March 2024 and shared information related to the probe while discussing a joint response.

The commission imposed the fines on the three companies after judging they harmed consumers by exploiting an oligopolistic market situation. It said the sugar market requires large-scale equipment for manufacturing and is subject to high tariffs, meaning imports are not freely available and barriers to entry are high. The commission said the three sugar makers' combined market share is about 89% based on domestic sales volume in 2024.

Ju said, "Sugar makers took advantage of this situation to generate stable profits, and colluded to maximise their own interests."

Sugar industry bows its head; CJ CheilJedang leaves the sugar association

The sugar industry moved immediately to contain the fallout. CJ CheilJedang said on Feb. 12 it will withdraw from the Korea Sugar Association, described as an interest group of sugar manufacturing companies.

It is also banning employees from contacting other sugar companies. The company said it will apply a one-strike-out rule for violations and strengthen internal punishment. It is also introducing a new process for deciding sugar prices. CJ CheilJedang explained it will introduce a "selling price decision system" that sets prices linked to costs and will disclose information related to price decisions, including import exchange rates and raw material prices.

CJ CheilJedang said, "We deeply apologise for causing concern to our customers and consumers," and added it will fulfil its responsibility to establish a transparent and fair competitive order.

Samyang also acknowledged there were shortcomings in some business-to-business sales practices and internal management systems, and explained it identified areas with potential legal violations and moved immediately to correct them. The company said it introduced a fair-trade compliance programme in November last year.

Samyang pledged collusion-prevention compliance training for the entire company, training for sales and purchasing-related departments, and building systems to strengthen anonymous reporting and monitoring.

Samyang said, "We humbly accept the results of the commission's investigation and take seriously that there were shortcomings in some business-to-business sales practices and internal management systems," and added it plans to closely review the matter and faithfully implement necessary follow-up measures in accordance with the law.