FTC says big stores cheated suppliers

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FTC says big stores cheated suppliers

The Fair Trade Commission said yesterday it has decided to impose a penalty of 6.2 billion won ($5.8 million) along with a corrective order on Lotte Department Store, Homeplus and Lotte Mart for violating the Law on Fair Trade in the Large-Scale Distribution Industry.

According to the anti-trust watchdog, Lotte Department Store unfairly demanded management information from independent retailers with space in its stores, specifically their sales figures in competing?department stores.

It was fined 4.573 billion won and will be subjected to audits to prevent similar violations for the next two years.

Discount chain Homeplus was fined 1.302 billion won and will be subjected to audits for making suppliers pay the salaries of?some of its salesmen and saleswomen, demanding free deliveries of goods and?getting other types of?subsidies from them.

The discount arm of Lotte Shopping, Lotte Mart, allegedly?forced 48 suppliers to cough up financial support for the fifth Lotte Mart Women’s Open golf tournament. It was fined 330 million won.

The FTC said demanding sales data from independent retailers with space in Lotte stores is prohibited by Article 11 of the enforcement decree of the Law on Fair Trade in the Large-Scale Distribution Industry.

It was found that Lotte forced retailers that had higher sales at competing department stores to hold more promotions to raise their sales at Lotte.

Homeplus allegedly collected around 1.7 billion won from suppliers to take their salesmen and saleswomen on its own staff. That is in violation of Article 12, Paragraph 3 of the Law on Fair Trade in Large-scale Distribution Industry, said the FTC.

Lotte Mart’s asking of money from suppliers for the golf tournament is in violation of Article 15 of the distribution law.



BY KIM JUNG-YOON [kjy@joongang.co.kr]

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