Watchdog slaps 11 local soju makers with 27.2 bln won fine for price rigging

(ATTN: ADDS comments, other info from 4th para)
SEOUL, Feb. 4 (Yonhap) -- South Korea's antitrust watchdog said Thursday that it
has decided to fine 11 local liquor manufacturers more than 27 billion won
(US$23.4 million) for colluding to fix the prices of their products.
Jinro Ltd. and 10 other makers of soju, a popular Korean alcoholic beverage made
from rice and other starches, are subject to the penalty, the Fair Trade
Commission (FTC) said.
The FTC fined Jinro the largest amount of 16.68 billion won, followed by Muhak,
Daesun and Bohae Brewery, which are facing fines of 2.63 billion won, 2.38
billion won and 1.88 billion won, respectively.
"We have decided to impose a combined 27.2 billion won on those companies in
penalties as they were found to have colluded to raise soju prices twice in May
2007 and December 2008 while they cooperated in determining other marketing
standards over the period," the FTC said in an e-mailed statement.
The move came after the watchdog notified the companies of its plan last November
to penalize them for price-fixing.
The companies, however, have claimed that they simply followed administrative
guidelines issued by the nation's tax agency, which reviewed Jinro's price
increase, adding that other smaller firms usually followed suit based on the
extent of the price hike by the industry's No. 1 player.
The latest move is part of the FTC's stepped-up efforts to crack down on price
rigging of products deemed to be closely related to the bottom line of low and
middle income earners who are more exposed to an economic slump.
Last December, the watchdog fined six major liquefied petroleum gas (LPG)
suppliers a combined 668.9 billion won for fixing prices, the largest ever
penalty slapped on a single industry here.
"In 2008, the government designated 52 items as daily necessities in a bid to
stabilize consumer prices, while asking the soju makers to refrain from raising
prices of soju, one of the products under the monitoring," the FTC said.
"They were, however, found to have constantly shared information and consulted on
when and how much they will raise their product prices since March 2008," the
watchdog added.
As of 2008, the soju market here is estimated at 3.11 trillion won, according to
industry data. No. 1 player Jinro holds a market shares of 51.46 percent in terms
of sales.
(END)