Imposition of Administrative Order and Fine of 283 Million KRW
Kyochon F&B received a corrective order and a fine of 283 million KRW from the Fair Trade Commission for unilaterally reducing the exclusive oil distribution margin of its partner company by abusing its trading position. The photo shows Kyochon F&B introducing its new menu item, "Kyochon Cheese Truffle Boneless." (Photo by Kyochon F&B)
Kyochon F&B, which unilaterally reduced the distribution margin for exclusive oil supplied to franchisees, has been sanctioned by the Fair Trade Commission.
On the 13th, the Fair Trade Commission announced that it decided to issue a corrective order and impose a fine of 283 million KRW on Kyochon F&B, the chicken franchise headquarters, for unilaterally lowering the distribution margin of exclusive oil for its partners by abusing its trading position.
According to the Fair Trade Commission, in May 2021, when the price of exclusive oil surged due to the impact of the COVID-19 pandemic, Kyochon F&B reduced the originally agreed distribution margin per can from 1,350 KRW to 0 KRW for the partners supplying exclusive oil to franchise stores.
In this way, from May to December 2021, Kyochon F&B caused its partners a total loss of over 700 million KRW in distribution margins. During this period, while the partners’ distribution margin sharply dropped from 1,350 KRW per can to 0 KRW, Kyochon F&B’s distribution margin increased.
This act constitutes an unfair trade practice of abusing trading position against the other party in transactions under Article 45 of the Monopoly Regulation and Fair Trade Act.
The Fair Trade Commission stated, "This measure is significant in that it contributes to establishing a fair trade order in the related market by strictly sanctioning unfair trade practices that abuse superior position during the contract period to reduce contractually guaranteed margins and cause disadvantages to partners."
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