Pork Belly Distributors Colluded for Six Years, Overcharging Consumers by at Least 20%

For six years, starting in 2018, pork belly distributors secretly colluded to set prices, leading consumers to pay at least 20% more than they should have for the popular cut. The Fair Trade Commission has confirmed these alleged price-fixing activities and launched an investigation into the companies involved. This case highlights a long-standing instance of unfair trade practices within the distribution chain of pork belly, a staple on many Korean tables.

The Fair Trade Commission is investigating major players in the domestic pork belly distribution market for allegedly controlling prices. The implicated companies are suspected of manipulating wholesale prices under the guise of supply and demand management, thereby stifling price competition. They are also accused of failing to pass on the benefits of price-decreasing factors to consumers. This led to increased retail prices, raising the burden of meat consumption for ordinary households.

Market data analysis indicates that actual consumer sales prices were maintained at approximately 20% higher than what would have been formed under competitive pricing in the absence of collusion. The economic benefits that should have gone to consumers were instead transferred to industry profits due to the distributors' price defense strategies and volume controls.

The Fair Trade Commission is focusing on securing tangible evidence of price agreements, including emails, messenger records, and meeting minutes exchanged between the companies. Key areas of investigation include whether the distributors used their market dominance to control supply volumes or to uniformly raise prices at specific times. This investigation is being conducted in line with the government's policy to stabilize food prices.

The Fair Trade Commission believes that the domestic pork market's pricing mechanisms have been distorted by the prolonged collusion. Even during periods of oversupply, high prices were maintained due to the cooperation among distributors. Consequently, the Fair Trade Commission is examining the profit margins at each stage of distribution to identify any unfair pricing elements.

Once the investigation concludes, the Fair Trade Commission plans to take legal action against the distributors for collusion. If the illegal activities are proven, measures such as substantial fines proportional to sales revenue and criminal prosecution will be pursued in accordance with relevant laws. The Fair Trade Commission is strengthening its market surveillance system to foster a fair competitive environment in the distribution market.