Checking Whether the Korea Pharmaceutical Association Exerted Influence as a Business Association
The Fair Trade Commission has begun fact-finding regarding the controversy over Ilyang Pharmaceutical's suspension of health functional food sales at Daiso. This is to investigate whether there was any violation of the Fair Trade Act, such as the Korea Pharmaceutical Association exerting undue influence during Ilyang Pharmaceutical's withdrawal from the Daiso health functional food business. If the business association, the Korea Pharmaceutical Association, unfairly restricts the business activities of its member pharmacists, it may be subject to fines and prosecution under the Fair Trade Act.
According to related ministries on the 10th, the Fair Trade Commission is currently verifying whether there were any legal violations related to Ilyang Pharmaceutical's withdrawal from the Daiso health functional food business. A Fair Trade Commission official stated, "We are in the stage of confirming the facts after receiving media reports related to Daiso health functional foods last week," adding, "It is difficult to comment on specific details."
On the 24th of last month, Ilyang Pharmaceutical launched nine health functional food products exclusively for Daiso. These Daiso-exclusive health functional food products, with adjusted ingredients and dosages to reduce prices to about 10% compared to pharmacies, received a warm consumer response. However, Ilyang Pharmaceutical suddenly decided to withdraw just five days after the product launch. Daewoong Pharmaceutical and Chong Kun Dang Health, which also introduced health functional foods at Daiso alongside Ilyang Pharmaceutical, are reportedly considering withdrawal as well. Subsequently, Kwon Young-hee, president of the Korea Pharmaceutical Association, held meetings with these three pharmaceutical companies and demanded corrective actions, which is speculated to be a response considering the strong backlash from pharmacists, including signs of a boycott movement.
The Fair Trade Commission is examining whether there was any illegality in the decision-making process of the three pharmaceutical companies to withdraw from the Daiso health functional food business. This includes whether the business association, the Korea Pharmaceutical Association, instructed or coerced individual pharmacists to boycott the pharmaceutical companies supplying health functional foods to Daiso. If a business association with business characteristics systematically intervenes in boycott instructions, it may constitute a prohibited act under the Fair Trade Act.
A legal expert stated, "If the business association, the Korea Pharmaceutical Association, unfairly restricts business activities by instructing or coercing its member pharmacists to participate in a boycott, it may be subject to fines and prosecution under the Fair Trade Act."
The Fair Trade Commission plans to identify the facts according to procedures and initiate a formal investigation if there is suspicion of legal violations.
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