Korean Job Discussion Forums

[Cerberus]

when even the country's soju makers get fined for price fixing and collusion it definitely means there is no honor or shame for constantly screwing even your fellow countrymen/countrywomen.

no shame. No light at the end of the tunnel.

I see most of the things I buy at the stores recently were adjusted for the annual Korean 15% inflation rate. (2-3% everywhere else in the developed or semi developed world). A can of tuna I like has gone up 90% (yes, doubled) since the summer of 2008.

http://www.koreatimes.co.kr/www/news/biz/2009/11/123_55744.html

Soju Makers Fined $196 Mil. for Price Rigging

By Kim Hyun-cheol
Staff Reporter

Makers of soju, South Korea's popular alcoholic drink, have been slapped with a 226.3-billion-won ($196.1 million) fine for price rigging, the nation's fair trade agency said Wednesday.

Eleven local manufacturers of the Korean distilled liquor are subject to the punitive action, according to the Fair Trade Commission (FTC).

Those companies have allegedly been colluding with each other to raise soju prices since 2006, the FTC said.

Jinro, the largest soju maker, was hit with the biggest fine of 116.2 billion won, while Doosan trailed with a 24.6-billion-won fine. Major provincial spirit makers are also subject to the fine. They include Daesun in Busan and Kumbokju in Daegu, which received fines of 20.6 billion won and 17.2 billion won, respectively.

The FTC slapped a 9.9-billion-won fine on Lotte Liquor BG, which took over Doosan's soju brand this March. The size of exact fines will be finalized next month after reviewing appeals from the involved makers.

Resistance, however, is likely to be strong this time even though the FTC says it has solid evidence to prove the charge.

The Korea Alcohol & Liquor Industry Association (KALIA) has delayed presenting its written opinion to gather more information.

Fined producers are obliged to submit their opinion notes within two weeks after receiving the investigation report. They can seek a court appeal if they are not satisfied with the FTC decision.

Spirit makers claim levying the fine is unfair in consideration of the current system for setting soju prices.

Normally, Jinro gets instructions on raising prices from the National Tax Service and the remaining firms follow that "guideline," according to KALIA. In that regard, soju distillers naturally go through a fine-tuning process with the government because it is impossible for other companies to set their price higher than Jinro, which takes up nearly 50 percent of the domestic market, the association said.

"The fines have been unfairly imposed and are too heavy for a lot of distillers. If the FTC sticks to such actions, all of the provincial soju makers will have to go under in the end," a KALIA official said on condition of anonymity.

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[steveinincheon]

They raise the prices and reduce the alcohol content.

[Nemo]

asmith still loves the boys at Jinro nevertheless.

[CentralCali]

It occurs to me that slapping a fine on them does nothing. As another poster noted, all they'll do is jack up the prices (some more). Want to put an end to that stunt? Put the company prez in the clink--no fine, no suspension. A year would be good!

[tatertot]

Price fixing/collusion is bad. However, I don't agree that soju makers colluding is worse than DRAM or LCD manufacturers colluding to fix prices. Are you arguing that alcohol companies should be more honorable than other companies? It is all equally bad. Maybe if it was children's hospitals or supposed not-for-profit corporations colluding, I would categorize it as "a new low."

[tatertot]

And isn't soju like 1000 won? Man, the manufacturing cost of soju must be approaching 0 if they've been artificially jacking up the price. By the way OP, I'm not insulting you or attacking you in any way. It can be hard to communicate nuances over the Internet, so I just wanted to clarify that.

[Cerberus]

I don't know what the extent of the price collusion was but it had to be substantial or egregious/brazen for the govt to step in, investigate it and announce it.

Don't get me wrong, I see and expect price collusion and a screw the customer mentality in every capitalist enterprise in every country, but it just seems to me that this is so much more pervasive and especially brazen in Korea. There is less competition, less free market price discovery and the cheobols control pretty much everything. Couple that with the easily manipulated Korean customer mind and you can then see why they'll pay double the price for "Korean" beef, or insist on flying KAL or Asiana instead of other carriers (another two firms that got busted and fined for price collusion)

What I find particularly offensive is the extent of the gouging and price hikes post the bursting of the housing bubble. Oil went from 140 bbl to 30bbl, the prices of all the grains and foods and commodities tumbled off a cliff but prices in Korea merrily keep skyrocketing, far above and beyond inflation anywhere else in the developed world.

and the excuses they come up with are ridiculous, ones that would never stand up to public or press scrutiny in the West.

[Cerberus]

[thrylos]

And artificially raising soju prices (specifically) is bad because....??????

[Cerberus]

[thrylos]

I get and agree with your point but

[Chambertin]

Meh, if anyone knew how much we overpay for Bud in the states and how much they rig the prices of big company "beer" through the chain you would vomit blood.

Then again Bud is so terrible you might vomit blood just from drinking too much.
It sucks that prices go up, but the fact I can get a good buzz for 1k won or so makes me so delighted they can price fix all they want.

Additionally using this as a "Bad Korea" slam for trying to hit their own people... You had better look at the practices in the US a little closer. It is obvious we perfected this and they are making a bad attempt to copy it at best.

Housing scandal, Enron, Texas Instruments, Medical Insurance, and it goes back and back, Lamp oil fixing, Yellow news, Railroads, all the way back to the colonial days.

[ashland]

[Cerberus]

[Underwaterbob]