Fair Trade Commission imposes fine on 'Mr. Pizza' for collecting toll fees from chairman's family

On the 5th, the Fair Trade Commission sanctions Mr. Pizza for unfair support practices

Mr. Pizza, which inserted a specific company into the cheese distribution process and collected a 'passage fee' for the chairman's family, was fined 779 million KRW and received a corrective order from the Fair Trade Commission.

According to the Fair Trade Commission on the 5th, Mr. Pizza, in 2014, to conceal suspicions of pizza cheese transactions through relatives of Mr. Pizza Chairman Jung Woo-hyun, recruited Jang-an Dairy, which was apparently unrelated to Mr. Pizza, as the passage fee company. Jung Doo-hyun, the younger brother of former Chairman Jung Woo-hyun, and Jang-an Dairy agreed to share the intermediary distribution profits.

Although it was more profitable to trade pizza cheese directly with Maeil Dairies, Mr. Pizza conducted transactions through Jang-an Dairy, the actual intermediary. Despite Jang-an Dairy playing no role in the distribution stage, Mr. Pizza and Jung Doo-hyun fabricated the transaction to appear as if the cheese supply contract was made in the order of 'Maeil Dairies → Jang-an Dairy → Mr. Pizza,' issuing tax invoices and manipulating related documents. Through this method, Mr. Pizza purchased approximately 17.7 billion KRW worth of pizza cheese from Jang-an Dairy.

After this incident, Jang-an Dairy's sales increased by 1.6 to 1.8 times compared to the previous year, operating profit increased by 1.6 times, and net profit increased by 7.7 to 9 times. The Fair Trade Commission judged this transaction as an unfair support act under the Fair Trade Act and imposed fines and corrective orders. The Commission stated, “Regardless of its own competitiveness, it secured a competitive advantage and hindered fair competition in the domestic pizza cheese market,” and added, “The Fair Trade Commission will continue to monitor unfair internal transactions and other unfair practices in sectors directly affecting the public’s daily life, such as the food service industry and franchise businesses.”