- Uncovered a long-term collusion spanning 7 years and 5 months; Imposed the largest-ever penalty surcharge -
July 7, 2026
The Korea Fair Trade Commission (KFTC, Chairman Biung-Ghi Ju) has decided to impose corrective measures—including a cease-and-desist order against legal violations and an order to independently redetermine prices—along with a total penalty surcharge of 747.6 billion KRW on four starch and starch sweetener manufacturers (hereinafter "starch companies"). The sanctions are for agreeing on and executing price increases and decreases for starch and starch sweeteners in Business-to-Business (B2B) transactions (such as with food companies, paper manufacturers, and steelmakers) over a period of 7 years and 5 months (May 2018 to October 2025).
Subject Companies: Daesang Corp., Sajo CPK Co., Ltd., Samyang Corporation, and CJ CheilJedang Corp. (Note: The KFTC has already filed criminal complaints against the four corporate entities and their executives, following a request by the prosecution in March 2026.)
Starch and starch sweeteners are utilized as raw materials not only in food products—such as confectionery, bakery items, noodles, beverages, and ice cream—but also in various manufacturing sectors like paper and steel. Therefore, any price increase in these products causes a massive ripple effect across both upstream and downstream industries.
The imported corn, which is the primary raw material for starch sweeteners, is jointly imported by these four starch companies. Considering the impact of starch sweeteners on national consumer prices and industrial competitiveness, the government has applied a 0% tariff quota on approximately 2 million tons of processing corn annually since April 2021.
Despite this government support, the four starch companies—which hold a near-monopoly in the domestic B2B market (95.7% for starch, 86.4% for starch sweeteners)—colluded to fix the scale and timing of sales price adjustments on 13 separate occasions over a long period of 7 years and 5 months. Notably, during a time when the entire national economy was struggling due to the COVID-19 pandemic and the Russia-Ukraine war, these companies engaged in price fixing to shift the burden of raw material (corn) cost fluctuations onto their corporate buyers, thereby maximizing their own unjust enrichment.
Between May 2018 and October 2025, during periods when corn prices increased, the four starch companies agreed to raise their sales prices to swiftly pass the cost increases onto their corporate buyers (8 occasions). These increases were applied across their entire B2B customer base. (Note: The cost of raw corn accounts for 60–70% of the manufacturing cost of starch and starch sweeteners.)
Conversely, during periods when corn prices decreased, the companies agreed to minimize the price reduction margins and delay the timing of the price cuts as much as possible in response to buyers' demands for lower prices (5 occasions). During this process, the starch companies maximized their profits by selectively lowering prices only for large direct corporate customers demanding reductions, while strictly maintaining sales prices for smaller corporate customers and distributors.
To minimize customer resistance during price changes, the starch companies meticulously agreed not only on the scale and timing of the price changes but also on the specific justifications provided (e.g., exchange rates, raw material costs) and the exact dates for sending official notification letters. The four companies would agree on a "target price" for each product category and then sequentially notify customers of prices higher than the target, thereby pressuring and inducing the customers to accept the target price as a compromise.
Following these agreements, the companies thoroughly monitored each other’s compliance when dispatching the official letters. For example, on the agreed-upon mailing dates, they would visit each other’s offices to verify that the price increase margins, implementation dates, and recipient addresses were drafted exactly as agreed. They even accompanied each other to the post office to confirm that the letters were actually mailed.
Furthermore, after notifying the entire customer base of the price change plans, the companies conducted joint price negotiations when necessary. For a specific buyer, the starch company with the highest transaction volume (the "lead company") would drive the negotiation, while the other companies (the "non-lead companies") would deliberately quote even higher prices to help persuade the buyer, effectively supporting the lead company in securing the targeted price.
The starch companies, controlling 95.7% of the starch market and 86.4% of the starch sweetener market, rapidly maximized sales price increases when international corn prices rose, and delayed price cuts to the absolute maximum when corn prices fell. Notably, when international corn prices surged due to the Russia-Ukraine war, they raised their sales prices by up to 73% compared to May 2018, when the collusion first began.
As a result, the starch companies were able to minimize any decline in operating profits while corn prices were rising. When corn prices fell, they improved their operating margins by minimizing the drop in sales prices relative to the drop in costs. Ultimately, this cost burden was passed down to corporate buyers, distributors, and eventually to final consumers as an inflationary pressure.
The KFTC has decided to impose a total penalty surcharge of 747,578,000,000 KRW (approx. 747.5 billion KRW) on the four companies. This is the largest penalty surcharge ever imposed by the KFTC in a cartel case.
As corrective measures, alongside the cease-and-desist order, the KFTC ordered the starch companies to independently redetermine the prices of their domestically sold starch sweetener products to a level that restores pre-collusion competition. The companies are required to report these price changes bi-annually for the next three years.
This order to independently redetermine prices is only the fourth of its kind in KFTC history, following the flour cartel cases (April 2006, May 2026) and the printing paper cartel case (April 2026).
The decision to issue the independent price redetermination order took into account:
- The collusion was sustained as a long-term practice spanning 7 years and 5 months.
- The domestic starch sweetener market has maintained an oligopolistic structure without significant market share shifts among the four companies for over 20 years, making the risk of recidivism high.
- The prices determined during the final agreement did not drop to pre-collusion competitive levels, meaning the effects of the agreement cannot be considered fully extinguished.
This case penalizes a prolonged price-fixing cartel within the domestic starch sweetener market. Following recent KFTC actions against cartels among sugar, flour, and paper manufacturers, this strict enforcement is expected to help stabilize the prices of groceries—which heavily impact the daily lives of citizens—and serve as a stern warning against unfair price hikes through collusion by oligopolistic businesses.
Moving forward, the KFTC plans to continuously strengthen its surveillance of cartel activities in sectors closely related to people's daily lives and will strictly enforce the law without exception when violations are detected.