Ramen makers tangled up in shady deals for nine years: FTCThe Fair Trade Commission said Thursday that it imposed fines totaling 135.4 billion won ($120 million) on four major instant noodle makers here for colluding to fix prices.
Nongshim, the market leader, was fined the largest amount of 107.7 billion won, followed by Samyang with 11.6 billion won, Ottogi with 9.7 billion won and Korea Yakult with 6.2 billion won.
The four companies had exchanged product information and fixed the prices of key items between 2001 and 2010, according to the state-run antitrust watchdog.
If Nongshim, which dominates almost 70 percent of the local ramen market, renewed its pricing policy first, other companies followed to increase prices in several phases.
They were also found to have shared sensitive management information such as sales figures, marketing subsidies and new product line-ups.
An annual meeting of company representatives, held every March, had long been a place where rival companies made shady deals, the FTC said.
“Consumers feel little difference among instant noodle products. So companies are competing with cheaper prices,” said a FTC official.
“In order to avoid resistance from the public and following sales decreases from individual price hikes, they colluded to fix prices for such a long time.”
The FTC said the latest punitive measures could end the practice and encourage fair competition within the industry, adding that companies have set prices individually since 2010.
Nongshim, however, denied that it encouraged other companies in price-fixing, claiming that it raised prices following changes in raw material costs.
“We owned more than 70 percent of market share and an unrivaled brand power at the time. There was no reason for us to discuss price increases with runner-up companies,” said a Nongshim spokesperson.
The spokesperson said that the FTC did not accept the company’s explanation during the investigation, adding that it might seek legal action after it receives the final notice from the authorities.
Despite the well-being trend in recent years, the FTC said, the local market for the popular processed food has seen strong growth largely driven by price hikes and high-end products.
As of 2010, the ramen sales reached 1.8 trillion won.
By Lee Ji-yoon (jylee@heraldcorp.com)