South Korea Fines Four Companies $540 Million for Starch Price-Fixing Cartel

South Korea's Fair Trade Commission (FTC) has imposed a hefty fine of 747.6 billion won (approximately $540 million USD) on four major starch and starch sugar manufacturers for engaging in a price-fixing cartel for over seven years. The companies, Daesang, Samyang Corp., Sajo CPK, and CJ CheilJedang, are accused of colluding on prices for business-to-business transactions, impacting industries ranging from food and beverages to paper and steel.

According to the FTC's investigation, the four companies, which hold a dominant market share of 95.7% in the starch market and 86.4% in the starch sugar market for domestic corporate sales, agreed on the timing and extent of price adjustments 13 times between May 2018 and October 2025. This included eight price increases and five price decreases.

Evidence suggests the companies manipulated prices by offering lower rates to large buyers who demanded reductions due to falling corn prices, while maintaining higher prices for smaller customers and distributors. They even coordinated official communications and verified each other's actions to ensure adherence to the agreed-upon price strategies. The FTC also noted that the companies colluded on prices for by-products used in animal feed and cooking oil.

The commission determined that the companies exploited government support, such as zero-tariff exemptions on imported corn, to unfairly increase profits. With corn costs accounting for 60-70% of their manufacturing expenses and the companies jointly importing the raw material, the FTC concluded they passed on the burden of fluctuating costs, exacerbated by events like the COVID-19 pandemic and the Russia-Ukraine war, onto their trading partners.

In addition to the fines, the FTC has issued corrective orders, including a directive for the companies to independently reassess and set their prices at appropriate levels. The investigation also encompasses allegations of bid-rigging and price collusion related to starch and starch sugar by-products, with potential fines calculated on a significant portion of the involved sales, amounting to approximately 940 billion won for bid-rigging and 1.55 trillion won for by-product price collusion.