SEOUL – The Korea Fair Trade Commission (KFTC) has officially concluded its investigation and commenced deliberation on a suspected price-fixing and supply-manipulation cartel involving seven major flour milling companies. The antitrust watchdog revealed on February 21, 2026, that it had dispatched an examination report—equivalent to an indictment—to the firms, signaling the beginning of formal sanctions procedures.

Dominance and Collusion
The investigation targets the heavyweights of the South Korean milling industry: Daehan Flour Mills, CJ CheilJedang, Samyang Corp., Sajo Dong-A One, Daesun Flour Mills, Samhwa Flour Milling, and Hantop. Together, these seven entities command approximately 88% of the domestic business-to-business (B2B) flour market.

According to the KFTC, these companies allegedly conspired to fix prices and allocate market volumes over a six-year period, from November 2019 to October 2025. The commission estimates the total revenue affected by this collusion at approximately 5.8 trillion KRW (approx. $4.3 billion USD). Under current South Korean law, the KFTC can impose administrative fines of up to 20% of the relevant revenue, meaning the final penalty could reach a staggering 1.16 trillion KRW (approx. $850 million USD).

Unprecedented Speed and Transparency
In a departure from standard protocol, the KFTC held an official press briefing at the examination report stage—the first time in the agency's history. Traditionally, such reports are treated as internal documents until a final verdict is reached. However, the commission cited the "public's right to know" and the "gravity of the impact on people's livelihoods" as reasons for this newfound transparency.

The speed of the investigation was equally remarkable. While major cartel probes typically exceed a year, this case was fast-tracked in just four months following the initial raid in October 2025. This efficiency was attributed to a dedicated five-person Task Force (TF) led by a senior director. The KFTC is reportedly considering expanding this TF model to other sectors affecting essential consumer goods.

Alignment with National Policy
This aggressive enforcement aligns with President Lee Jae-myung’s recent mandates regarding inflation control. During a cabinet meeting last September, President Lee emphasized that structural issues and oligopolistic behaviors in the distribution chain are primary drivers of the rising cost of living.

"We must scrutinize why food prices remain disproportionately high," the President stated, specifically pointing toward potential collusion within industries dominated by a few large corporations. He urged the government to intervene where market failures or unfair practices exacerbate the burden on ordinary citizens.

Broader Crackdown on Food Industry
The flour cartel case is expected to serve as a catalyst for a series of upcoming rulings. The KFTC is currently broadening its scope to include other essential food categories, having conducted on-site investigations into:

Meat processing and beverage companies (April/May 2024)
Confectionery manufacturers (April 2025)
The Korea Poultry Association (June 2025)

"The commission remains steadfast in its commitment to rooting out unfair trade practices that undermine the market economy," a KFTC official stated. "For violations that directly harm the livelihoods of the people, we will ensure that strict legal enforcement is carried out swiftly and without exception."

The seven milling companies will now be given the opportunity to present their defense before the KFTC makes a final determination on the exact scale of the fines and corrective orders.

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