Kim Chan-ho, CEO of CJ CheilJedang, and Lee Un-ik, CEO of Samyang Foods, bowed their heads side by side at the audit session regarding the price-fixing scandal involving food raw materials such as sugar. They also unveiled measures to prevent recurrence, including blocking contact with competitors and strengthening internal control systems.
Kim (CEO) appeared as a witness at the Ministry of Agriculture, Food and Rural Affairs audit session held by the National Assembly's Committee on Agriculture, Food and Rural Affairs on the afternoon of the 7th, stating, "On behalf of the company, I bow my head in apology to the public for having undermined the order of fair competition and failing to meet the expectations of the market and customers."
Kim (CEO) stated, "Taking this incident as an opportunity, we are comprehensively reviewing and correcting our corporate systems and culture from scratch," adding, "The first step is to fundamentally block contact with competitors." CJ CheilJedang has withdrawn from relevant industry associations and has implemented procedures requiring pre- and post-event reporting in cases where meetings with competitors are unavoidable.
He emphasized that strong personnel actions are being taken against executives and employees involved in the price-fixing. Kim (CEO) said, "We are conducting intensive training for all members of the organization," adding, "Through our internal leniency program (voluntary self-reporting system), we are proactively identifying and addressing problematic issues before they escalate." He further stated, "Price-fixing must never happen again at CJ CheilJedang," adding, "We will strive to become a company that leads in compliance management and fair trade."
Lee Un-ik, CEO of Samyang Foods, also appeared as a witness that day, stating, "It is truly regrettable that we failed to uphold trust despite being companies supported by the government and the National Assembly," adding, "We will devote all our efforts to internal controls and compliance management to ensure such incidents do not recur."
Lee (CEO) announced plans to revise internal control systems and regulations for executives and employees. He said, "We have adjusted our systems to fundamentally prevent any price-fixing-related activities and are currently implementing them," adding, "We will solidify our internal control system and clearly define the responsibilities of executives and employees in service regulations and employment rules to ensure such incidents never happen again."
The CEOs of both companies appeared on this day following a series of food raw material price-fixing cases detected this year. The Fair Trade Commission imposed fines of 138.3 billion won on CJ CheilJedang and 130.2 billion won on Samyang Foods for sugar price-fixing, and fines of 102.965 billion won and 210.34 billion won respectively for starch and starch sugar price-fixing. Combining both cases, the total fine for CJ CheilJedang is approximately 241.3 billion won, while Samyang Foods faces a total of approximately 340.5 billion won.
The Korea Fair Trade Commission imposed fines on food companies this year totaling 396 billion won for sugar, 671 billion won for flour, and 747.6 billion won for starch and starch sugar. In the case of sugar price-fixing, investigations revealed that related companies had agreed in advance on the timing and magnitude of price increases and decreases for business-to-business (B2B) sugar over a long period. It was determined that they restricted competition by reflecting cost increases in selling prices when raw sugar prices rose, and by reducing the extent of price cuts or delaying their implementation when prices fell.
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