KT&G fined over ‘unfair’ business practices

South Korea’s Fair Trade Commission (FTC) has fined KT&G WON2.5 billion ($2 million) for encouraging retailers not to sell the cigarettes of ‘foreign competitors’, according to a story in The Korea Times

At the same time, KT&G was ordered to correct its ‘unfair’ business practices. The FTC said the company had offered cigarettes at discounted prices to retailers that carried only its products.

And it had signed contracts with eight convenience store chains under which KT&G products had to account for up to 70 percent of the cigarettes on display.

The Times quoted an FTC official as saying that KT&G had clearly violated the nation’s anti-trust law by forcing retailers to deal with its products only.

“The company deprived its competitors of opportunities to market their brands to consumers,” the official said. “Its practice also stripped consumers of a chance to buy competing products.”

The official said the FTC would make sure KT&G stopped unfair business practices. “We will take steps to normalize the country’s monopolistic cigarette market and promote competition among cigarette makers to benefit consumers,” the official added.

KT&G said it had already taken steps to correct some of its ‘unfortunate’ practices. ‘We will organize a series of lectures to better inform our employees of the country’s fair trade rules,” the company said. ‘We will do everything else to abide by the anti-trust law.’