CJ CheilJedang CEO Kim Chan-ho bowed his head in apology regarding the collusion incident involving food raw materials such as sugar. He also re-promised measures to prevent recurrence, including fundamentally blocking contact with competitors and strengthening personnel actions against executives and employees involved in the collusion.
Kim (CEO) appeared as a witness at the National Assembly's Committee on Agriculture, Food and Rural Affairs, Forestry and Fisheries national audit session on the afternoon of the 7th, stating, "On behalf of the company, I bow my head to apologize to the public for having undermined the order of fair competition and failing to meet the expectations of the market and customers."
He added, "Taking this incident as an opportunity, we are comprehensively reviewing and rectifying our corporate systems and culture from scratch," noting, "Among various measures, the first is to fundamentally block contact with competitors."
CJ CheilJedang withdrew from relevant associations, such as the Korea Sugar Manufacturers Association, to reduce the possibility of contact with competitors. The company explained that it manages situations where meetings with competitor representatives are unavoidable by requiring pre- and post-meeting reporting procedures. It is also promoting measures to prevent recurrence, including strengthening its pricing decision system linked to costs and enhancing the functions of its compliance management committee.
The company has strengthened recurrence prevention education and internal sanctions for executives and employees. Kim (CEO) emphasized, "We are conducting intensive training for all members," adding, "We are making it clear that collusion must never happen again at CJ CheilJedang."
He stated, "We are taking strong personnel actions against executives and employees who participated in the collusion," and added, "Through our internal leniency program (voluntary self-reporting system), we proactively identify and address issues that could become problematic before they escalate." He further added, "We will strive to ensure that CJ CheilJedang, a food company serving Han Min-guk-eul (CEO), becomes a leader in compliance management and fair trade."
Kim (CEO)'s appearance on the day was due to the successive detections of food raw material collusion at CJ CheilJedang this year. The Committee on Agriculture, Food and Rural Affairs, Forestry and Fisheries had originally designated CJ CheilJedang Vice President Jo Young-sik as a witness, but Kim (CEO) voluntarily appeared in his place.
CJ CheilJedang was sanctioned by the Fair Trade Commission after it was detected that the company participated in collusion in major material food markets, including sugar, flour, and starch/starch sugars, this year. The fines imposed by the Korea Fair Trade Commission on related companies this year amounted to 396 billion won for sugar, 671 billion won for flour, and 747.6 billion won for starch/starch sugars. Among these, the fines imposed on CJ CheilJedang totaled approximately 373 billion won across the related cases.
In the case of sugar collusion, investigations revealed that CJ CheilJedang, Samyang Corporation, and Daehan Sugar had pre-agreed on the timing and magnitude of price increases and decreases for business-to-business (B2B) sugar supply prices over a long period. The Korea Fair Trade Commission determined that the companies restricted competition by quickly reflecting cost increases in prices when raw sugar prices rose, while reducing the magnitude of price cuts or delaying their timing when raw sugar prices fell.
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