South Korea Revokes Egg Association's License Over Price-Fixing Violations

The Ministry of Agriculture, Food and Rural Affairs (MAFRA) announced on August 29 that it has revoked the non-profit corporate license of the Korea Shell Egg Producers Association. This drastic measure follows findings that the association violated the conditions under which its license was granted, including engaging in activities that infringed upon public interest, such as price-fixing.

According to MAFRA, the association was initially granted its non-profit status in January 2023 with the explicit conditions that it comply with the Fair Trade Act and refrain from determining and notifying shell egg prices. However, investigations revealed that the association repeatedly set and communicated indicative prices for shell eggs based on weight, typically on Wednesdays, via text messages and faxes. These prices then served as a basis for farmers to set their own production costs.

This practice was previously identified as price-fixing by the Fair Trade Commission (FTC) in May, which resulted in a corrective order and a fine of 594 million won (approximately $440,000 USD) against the association. MAFRA concluded that the association's continued violation of the permit's core conditions, coupled with its proven infringement of fair trade laws, constituted a significant breach of public interest, justifying the revocation of its corporate license under civil law.

The Korea Shell Egg Producers Association has voiced strong opposition to the ministry's decision, characterizing it as an action that dismantles a crucial channel for communication and cooperation between the nation's egg producers and the government. In response, MAFRA stated its intention to maintain policy dialogues and consultations with egg farmers through other industry organizations, such as the Korea Layer Farmers Association.

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The violation of the conditions that formed the premise of the establishment permit, and the infringement of public interest through violation of the Fair Trade Act, have been recognized.