FTC to probe processed food pricesThe Fair Trade Commission (FTC) is putting processed food companies under the microscope and will thoroughly probe any signs of attempted price-rigging in a bid to keep a lid on the price of the daily necessities, it said yesterday.
“We are examining processed foods that have raised their prices from the end of last month until early this month,” said a high-ranking official from the nation’s antitrust watchdog.
The move comes in response to recent criticism that the government is not doing enough to crack down on recent price hikes in this area, despite its pledges to limit inflation of daily necessities so as not to overburden debt-wracked households.
Critics have been more vocal in their attacks on what they see as a lame-duck government that only has a few months remaining in office, arguing that it needs to step up its game in terms of curbing consumer price growth.
“As concern grows over the rising prices of daily necessities and food products, we need to make sure supply remains stable and prices are well managed ahead of the Chuseok holiday [Korean Thanksgiving] which runs from Sept. 29 and Oct. 1,” said President Lee Myung-bak during a cabinet meeting on Monday. Targeted items include tuna, ramen, soft drinks and instant rice.
CJ CheilJedang and Ottogi recently raised the prices of their instant rice, while Dongwon F&B hiked the price of tuna, and Lotte Chilsung and Coca-Cola Korea followed suit with their respective soft drinks. Samyang Ramen and Paldo jacked up their ramen prices, and OB Beer and Hite Jinro lifted their beer prices.
The FTC said it will look into whether any of these moves involved unfair business practices, such as clandestine agreements among food companies, as well as making sure the upwardly revised prices were appropriate.
“The inspection work will take place in an unprecedentedly detailed manner,” said the official. “Even in situations where food companies exchanged information on imported grain prices but did not sign an official agreement to increase prices, we can call this price-rigging.”
“The processed food industry is oligopolistic in structure, with two or three companies totally dominating the local market,” he added. “As the price hikes all took place over a short period of time, we can’t rule out the possibility of collusion.”
The FTC said it will exclude agricultural and fishery products from its inspection list as price rigging is unlikely to have occurred in these markets.
By Kim Jung-yoon [email@example.com]