FTC investigating Lotte, Coca-Cola for price-fixing conspiracy

The Fair Trade Commission's office in Sejong [FAIR TRADE COMMISSION]

Korea’s antitrust agency launched an investigation into Lotte Chilsung Beverage and Coca-Cola Beverage on Wednesday over allegations of a price-fixing conspiracy amid the government's effort to rein in inflation in the country.

The Fair Trade Commission (FTC) began an on-site investigation on Wednesday, seizing related documents, the spokesmen of the two companies said while not confirming the purpose of the probe.

The watchdog is moving on speculation that they colluded to raise their beverage prices, according to local reports.

Lotte Chilsung Beverage, known for Chilsung Cider, provides soft drinks such as Pepsi-Cola and canned coffee such as Cantata. Coca-Cola Beverage mainly sells soft drinks like Sprite and Fanta in addition to its flagship beverage along with ion drinks.

The FTC's move is in line with the government's stance on stabilizing consumer prices. President Yoon Suk Yeol on April 2 vowed to inject an “unlimited” amount of funds with the intent of limiting inflation in agricultural and livestock products “without a time frame” until people feel that prices have stabilized.

The antitrust agency has since probed an array of companies in the food, school uniform and furniture businesses over allegations of price-fixing.

“The price growth of agricultural and livestock products has started to slow somewhat from late March, but remains high,” said Yoon. “We will have to thoroughly prepare for climate change, which has become the new normal,” he added, as atypical weather has been partially blamed for the recent price surge.

In April, Korea’s inflation slowed, with consumer prices increasing at a relatively milder pace of 2.9 percent on year compared to the previous month.

Lotte Chilsung, Coca-Cola and three other beverage makers — Haitai Beverage, Woongjin Foods and Dong-A Ostuka — were investigated for price-fixing in 2009, resulting in a combined fine for Lotte, Haitai and Woongjin totaling 25.4 billion won ($18.5 million), while Coca-Cola and Dong-A were exempted for voluntarily admitting to the offense.

BY CHOI HAE-JIN [choi.haejin@joongang.co.kr]