Kyochon F&B has been sent to trial on accusations it unilaterally eliminated the distribution margin of partner firms supplying cooking oil used to fry chicken.

Industry sources said the Criminal Division 3 of the Seongnam Branch of the Suwon District Prosecutors' Office on Thursday indicted Kyochon F&B, operator of Kyochon Chicken, without detention on charges of violating the fair trade law. It is accused of using its superior bargaining position to cut the distribution margin for two cooking-oil distribution partners from 1,350 won per can to 0 won from May to December 2021.

The investigation found Kyochon F&B shifted the increase onto its partner firms by eliminating the margin after it faced demands from cooking-oil manufacturers in April 2021 to raise purchase prices. The distributors were found to have suffered losses of about 700 million won as a result.

The Fair Trade Commission earlier imposed a penalty of about 280 million won on Kyochon F&B in October 2024 over the case. Kyochon F&B filed an administrative lawsuit challenging the decision. The Seoul High Court ruled in February that the unilateral change to a 0 won supply margin during the contract period was unfair and found against the plaintiff.