Regulator fines Mr. Pizza for obstructing rival's operations

A Mr. Pizza sign [YONHAP]

Korea's antitrust regulator said Tuesday it has decided to slap a fine of 400 million won ($302,158) on local chain operator Mr. Pizza for obstructing a rival's operations.

The punitive action against Mr.Pizza came in response to the company's interference with Pizza Union Coop's operations, including disrupting the supply of ingredients, the Fair Trade Commission (FTC) said.

Pizza Union Coop was founded by individuals who previously operated Mr.Pizza stores but left the franchise following disagreements with the market's second-largest player.

In 2017, Mr.Pizza directly opened new locations near Pizza Union Coop's stores where it rolled out massive discount promotions.

The regulator said it was evident that Mr.Pizza opened its directly controlled stores with the intention to obstruct the operation of Pizza Union Coop, as it previously opened such shops only in busy areas, including Gangnam in southern Seoul.

It also filed a lawsuit against the founder of Pizza Union Coop for defamation and exerted influence on ingredient suppliers to cut off shipments to the newly established firm.

"Due to Mr.Pizza's actions, Pizza Union Coop faced obstructions in developing a new menu and securing the supply of ingredients, as well as managing its stores or recruiting new owners," the FTC said.

In 2017, Mr.Pizza saw its sales reach 81.5 billion won with 311 stores, standing as the country's second-largest player. Domino's topped the list with 219.7 billion won with 442 stores.

Mr.Pizza took sixth place in 2021 with sales of 32.2 billion won and 217 shops under operation.

Yonhap