SEOUL — In a massive crackdown on "livelihood crimes" that have devastated the household budgets of ordinary citizens, South Korean prosecutors have indicted 52 individuals and several major corporations for allegedly orchestrating a price-fixing cartel worth nearly 10 trillion KRW ($7.5 billion USD).
The Seoul Central District Prosecutors' Office announced on Monday that its Fair Trade Investigation Division, led by Head Prosecutor Na Hee-seok, concluded a concentrated investigation into the collusion of essential consumer goods including flour, sugar, and electrical components. The total scale of the rigged bids and price-fixing is estimated at 9.94 trillion KRW.
Bread, Sugar, and Power: The Anatomy of a Cartel
The investigation revealed that the cartels directly contributed to a sharp rise in inflation, specifically targeting goods that consumers cannot easily avoid.
The Flour Cartel (5.99 Trillion KRW): Six major milling companies, including Daehan Flour Mills, Sajo Dong-A One, Samyang Corp, Daeseon Flour Mills, Samhwa, and Hantop, were indicted. Prosecutors allege that from January 2020 to October last year, these firms conspired to fix price hike timings and margins. During this period, flour prices surged by as much as 42.4%.
The Sugar Cartel (3.27 Trillion KRW): Industry giants CJ CheilJedang and Samyang Corp were charged with price-fixing that led to a 66.7% spike in sugar prices. Notably, prosecutors found that these companies maintained high prices even when international raw sugar costs dropped, effectively "exploding" their profit margins at the expense of consumers.
The Electricity Bid Rigging (677 Billion KRW): Ten power equipment manufacturers, including LS, Hyosung, and Hyundai, were indicted for rigging 145 bids issued by the Korea Electric Power Corporation (KEPCO) between 2015 and 2022. They allegedly pre-selected winners and shared pricing data to ensure high winning bids, pocketing at least 160 billion KRW in unfair profits.
President Lee Jae-myung Pledges "Price Restoration"
The scale of the case prompted a rare direct response from President Lee Jae-myung. Taking to social media (X), the President commended the prosecution, stating, "The prosecution has achieved a great result. I ask the public to praise a job well done."
President Lee further noted that he has briefed the Cabinet on the investigation's findings. "I have ordered necessary measures, including amending laws to raise the maximum legal penalties, reclaiming all unfair profits from colluding firms, and restoring prices to their original levels," he added.
Context: A Global Trend of "Greedflation" Crackdowns
This prosecution comes amid a global movement where governments are increasingly scrutinizing "Greedflation"—a phenomenon where corporations use inflation as a cover to hike prices far beyond their increased costs.
According to data from the OECD and Global Competition Authorities, price-fixing in essential sectors like food and energy can depress a nation's GDP by up to 1-3% due to reduced consumer purchasing power. By taking legal action against the flour and sugar "duopolies," South Korea joins the ranks of the EU and the US in targeting corporate collusion to stabilize domestic markets.
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