Prosecutors Indict Samyang Foods CEO and Former CJ CheilJedang Executive Over Sugar Price Collusion Allegations

"Samyang Foods, CJ CheilJedang, and Daehan Sugar": Alleged Four-Year Collusion Among Top Three Sugar Companies
Prosecutors: "Collusion Worth 3.27 Trillion Won... Sugar Prices Raised by Up to 66%"

The head of Samyang Foods Group and a former executive of CJ CheilJedang, both implicated in allegations of sugar price collusion, have been indicted and will stand trial while in detention.

On November 26, the Fair Trade Investigation Division of the Seoul Central District Prosecutors’ Office, led by Chief Prosecutor Na Heeseok, indicted Choi, the CEO of Samyang Foods, and Kim, a former senior executive who oversaw Korean food operations at CJ CheilJedang, on charges of violating the Fair Trade Act.

The prosecution also brought charges against the corporate entities of Samyang Foods and CJ CheilJedang, as well as five executives and employees from Samyang Foods and four from CJ CheilJedang. However, Daehan Sugar and its executives and employees, who are also suspected of participating in the collusion with Samyang Foods and CJ CheilJedang, were excluded from this round of legal action.

According to prosecutors, the three leading domestic sugar companies-CJ CheilJedang, Samyang Foods, and Daehan Sugar-are accused of colluding to prearrange changes in sugar prices, including the timing, scale, and frequency, from February 2021 to April of this year, resulting in collusive activities worth 3.2715 trillion won. The prosecution suspects that, as a result of this collusion, sugar prices were raised by as much as 66.7% compared to before the collusion began.

Prosecutors also believe that when the price of raw sugar, the main ingredient for sugar, increased, these companies quickly reflected the rise in their sugar prices. Conversely, when the price of raw sugar fell, they only minimally lowered their sugar prices, thereby maximizing profits and passing the burden onto consumers.

A prosecution official stated, “The three sugar companies have been repeatedly caught colluding in the past, but penalties have been limited to corporate fines, allowing collusion to become an entrenched problem in the industry. We will do our utmost to maintain the indictment and eradicate collusion, which severely harms the livelihoods of ordinary people.”