The nation’s antitrust watchdog said Wednesday that it has imposed fines worth 4 billion won ($3.6 million) on three retail units of Shinsegae Group for offering unfair favors to their sister bakery chains.

It is the first time that bakery chains affiliated with a major conglomerate here are facing sanctions for irregularities amid growing criticism that their fast proliferation is threatening other independent mom-and-pop stores.

The Fair Trade Commission said Shinsegae Department Store, E-Mart and Shinsegae Everyday ― the flagship department store and discount store chains of the retail giant Shinsegae ― have lowered commission fees for their sister bakery unit Shinsegae SVN to use floor space.

Officials said Shinsegae Group decided to support Shinsegae SVN, of which a 40 percent stake is owned by the group’s scion Chung Yoo-kyung, in 2009 when its bakery business started seeing slowing sales.

Some documents secured by the watchdog showed that Shinsegae Group vice chairman Chung Yong-jin, the elder brother of Chung, has directly been involved in offering “unfair” favors.

According to the agency, Shinsegae Department Store and E-Mart ― the nation’s top retailers ― lowered commission fees for Shinsegae SVN’s Day and Day brand from 23 percent to 20.5 percent, saving the company 3.3 billion won, worth almost 93 percent of its profits last year.

The fees for another brand Veccia e Nouvo were also lowered to 15 percent, while the average rate for other bakery stores to use floor space of the Shinsegae outlets was 25.4 percent.

The FTC estimated that transactions worth a combined 184.7 billion won were made through such activities and the actual financial support from the group amounted to 6.2 billion won.

During the same period, Shinsegae SVN saw its sales nearly double from 136.6 billion won in 2009 to 256.6 billion won last year. Chung, the largest shareholder, received a combined 1.2 billion won in dividends.

“The sanction is expected to be an opportunity to curb the prevalent easy money-making of an owner family who can use the nationwide distribution channel at cheaper costs,” said Kim Hyoung-bae, the FTC’s antimonopoly bureau chief, in a news briefing.

Shinsegae, however, denied the allegations, saying it was considering taking legal actions.

By Lee Ji-yoon (jylee@heraldcorp.com)