"Big 4" Ice Cream Company Executives Found Guilty Again in Price-Fixing Appeal... Binggrae Fined 200 Million Won

Additional Charges Recognized for Binggrae
First Trial Sentences Remain Unchanged

Executives from the "Big 4" ice cream companies?Binggrae, Lotte Food, Lotte Confectionery, and Haitai Confectionery?who were put on trial for colluding to fix ice cream prices, were once again found guilty in their appeal trial.

On June 26, the Seoul Central District Court Criminal Appeals Division 4-2 (Presiding Judges Eom Cheol, Yoon Wonmook, and Song Jungho) held the sentencing hearing for Binggrae Corporation and others, who were indicted for violating the Monopoly Regulation and Fair Trade Act. As in the first trial, the court sentenced Binggrae executive Choi to one year in prison, suspended for two years, and imposed a fine of 200 million won on Binggrae Corporation. Appeals by the executives of Lotte Food, Lotte Confectionery, and Haitai Confectionery were dismissed.

The court found all defendants guilty, including charges that were amended in the second trial. In the first trial, the court had acquitted the defendants of colluding on product-type sales prices at convenience stores and on agreeing to raise prices for cone-type products sold through retail channels. However, in this appeal, the court found them guilty on these charges.

The court stated, "Binggrae claims that the price reduction was not based on an agreement, but since all four manufacturers agreed in principle to lower prices for the same purpose, it appears to have been the result of monopolistic decision-making." The court also said, "With regard to sandwich-type products, it is difficult to view the price adjustments as simply due to product changes or cost increases, as the prices were determined based on an agreement linked to profit margins."

However, regarding Choi, the court stated, "Although there are additional points for which guilt is recognized, even taking these into account, there does not appear to be a need for a heavier sentence than the original ruling," and thus maintained the original sentence.

Binggrae and Lotte Food were accused of agreeing to raise sales prices by product type and not to compete for retail store market share between February 2016 and October 2019. It was also found that they restricted items included in the "2+1 promotion" at convenience stores and agreed on promotional profit margins. Executives from the four companies were also accused of pre-arranging the order and winners for Hyundai Motor Company's ice cream supply bids between June 2017 and May 2019. After investigating the case in 2021, the Fair Trade Commission imposed fines totaling approximately 135 billion won on the four companies and referred Binggrae and Lotte Food to the prosecution.