Lawmaker blasts Haitai decision

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Lawmaker blasts Haitai decision

The Fair Trade Commission (FTC) will not pursue penalties against Haitai Confectionery & Foods even after acknowledging that the company violated the law, a liberal lawmaker said Friday.

Haitai was accused of breaching fair-trade law by packaging its hugely popular Honey Butter Chips with less-known products last year.

The company has said retailers were responsible for the packaging.

But Shin Hak-yong of the New Politics Alliance for Democracy, a member of the National Assembly Committee of State Affairs, released Haitai’s marketing documents from November proving the packaging was part of the company’s marketing strategy.

The documents were later submitted to the FTC.

Honey Butter Chips took the snack market by storm in the second half of 2014.

As the chips got more popular, shops of all sizes started selling the them together with other snacks. At some large discount chains, people lined up to buy one bag of Honey Butter Chips that was sold along with beer. The public was outraged.

In early December, then-nominee and current FTC Chairman Jeong Jae-chan said he would investigate.

Shin released the document after the FTC told the National Assembly Committee that Haitai’s cross-sales were a breach of fair-trade law, but the committee decided not to punish the company because its actions did not seriously violate consumers’ right to buy other similar-tasting chips.

“The FTC decided not to punish Haitai, because there are many alternatives for consumers,” the FTC wrote in a statement to Shin. “Haitai’s marketing strategy of controlling production did not breach the fair-trade law. The company started expanding its production in December.”

According to the documents unveiled by Shin, Haitai’s marketing department ordered non-chaebol supermarkets to package four different snacks, including Honey Butter Chips, to attract customers.

Haitai ordered the shops to give a 30 percent discount on three bags and offer the fourth free.

This made each package, originally 6,000 won ($5.5), sell for 3,300 won.

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