Lotte told to sell Incheon area storesThe Fair Trade Commission said yesterday that Lotte, the largest retail conglomerate in the country, must sell branches in Incheon and Bucheon, if it wants to take over the Incheon branch of its archrival Shinsegae.
The antitrust agency’s move is aimed at preventing a monopoly in the region, since Lotte will have more than 60 percent of the market after the takeover in 2017.
Lotte operates three department stores in the Incheon and Bucheon areas.
Now it plans to acquire the Shinsegae branch, which currently accounts for 36 percent of the market, located at the Incheon City Terminal complex as its lease with Shinsegae ends in 2017.
The Incheon Metropolitan City government is preparing to sell some land at the city terminal to Lotte.
“Lotte and Incheon City are seemingly moving to transact some of the terminal’s land, but the core of the transaction is to let Lotte take over the Incheon branch of Shinsegae,” the FTC said.
Lotte Incheon Development, a special purpose company set up last year, signed a 900 billion won deal ($803.1 million) with Incheon to acquire some of the terminal buildings and land on Jan. 30.
The Incheon city government has been trying to sell the terminal to address its financial difficulties, according to the FTC.
“The agency decided to order Lotte to make corrective measures now, since it can predict that there could possibly be monopolizing practices by Lotte,” the FTC said. “So we are taking an early measure to prevent that. It is highly likely Lotte would limit competition in Incheon and Bucheon.”
The FTC said Lotte is expected to hold a 63 percent share of the regional market by 2017 if it acquires the Shinsegae branch, up from its current 31 percent.
The agency told the retail giant to sell two branches in the region within six months after Shinsegae’s contract with Incheon expires in 2017. Potential buyers shouldn’t have any relation with Lotte Group.
Lotte said it respects the FTC’s order. “Since the measure is going to take effect after 2017, there can be some changes,” said Lee Seon-dae, head of Lotte Shopping’s communications team.
By Song Su-hyun [firstname.lastname@example.org]