Posted November. 04, 2009 08:47,
The Fair Trade Commission yesterday said it will impose the heaviest fine in the countrys history on six suppliers of liquefied petroleum gas, sending a strong warning to the players in the oligopolistic market.
The companies are seen to have raised prices through cartels and pocketed illegal profits rather than cutting prices through competition since the 2001 revocation of a public pricing system.
Due to such unfair practices, the commission said the prices of daily necessities such as LPG, refined oil and mobile phone fees have remained high or increased despite price cut factors, triggering inflationary fears.
The commissions latest move is an example of Chairman Chung Ho-yuls philosophy of never forgiving the illegal trade practices of conglomerates while acknowledging their contributions.
In a news conference following his appointment Sept. 14, he said, Conglomerates have been spearheading Koreas economic growth, but added, But we will mobilize our full capacity to closely monitor unfair trade practices and crack down on them.
The stern warning to the LPG industry is related to the governments efforts to stabilize price levels. The commission has repeatedly expressed a strong commitment to help lower price indirectly by investigating price rigging and unfair trade practices.
For this reason, the trade watchdog focused on monitoring the prices of key daily necessities, including beef, gift sets and milk, ahead of the Chuseok holiday this year.
The same holds true with LPG. Chung said in his first news briefing, We will put our utmost priority on minimizing damage inflicted on ordinary people and small and medium-size enterprises.
If and when we confirm a cartel among LPG suppliers, we will take stern action by taking into account their acts that aggravate the burden on the working class.
The commissions general assembly in mid-November is expected to finalize its decision to penalize the LPG industry, and this should reduce the chance of a similar price cartel.
A senior manager at a large sugar producer said, The fines are obviously exorbitant, but added, It will become out of the question to even think about price rigging from now on. Sugar is an item subject to government price control.