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Photo = Yonhap news |
[Alpha Biz= Paul Lee] The Korea Fair Trade Commission (FTC) is investigating allegations that Daiso, a discount retail chain, was obstructed from selling health supplements. Meanwhile, the Korea Pharmaceutical Association (KPA) is facing a "power abuse" controversy. The pharmaceutical industry views this investigation as an opportunity to expand distribution networks, free from the pressure of the KPA.
On the 13th and 14th, the FTC dispatched investigators to the KPA's office in Seocho-gu, Seoul, for an on-site investigation regarding potential violations of the Fair Trade Act. The investigators reportedly conducted intense 7-hour interviews with pharmaceutical companies supplying health supplements to Daiso, investigating whether the KPA had exerted pressure on them.
The key issue under investigation is whether the KPA pressured pharmaceutical companies such as IlYang Pharmaceutical, Chung Kun Dang Healthcare, and Daewoong Pharmaceutical to withdraw from selling health supplements at Daiso, and whether the KPA encouraged pharmacists to participate in a boycott. Suspicion arose when IlYang Pharmaceutical decided to withdraw its nine health supplement products from Daiso just five days after they started selling them, leading to speculation that there was pressure from the KPA.
Industry sources have confirmed that there are indications of the KPA pressuring pharmaceutical companies to withdraw from Daiso. However, the FTC has stated that it cannot provide detailed information about the investigation at this stage. A spokesperson from the FTC's service cartel investigation team commented, "We are currently reviewing the materials gathered from the on-site investigation."
The KPA initially opposed Daiso's sale of low-cost health supplements, arguing that it could create the misconception that pharmacies had been overcharging for such products. However, as some pharmacists called for a boycott of pharmaceutical companies selling at Daiso, public opinion soured, leading to accusations of "power abuse" within the KPA.
The Korea Consumer Protection Association issued a statement on the 7th, asserting, "Health supplements are not pharmaceuticals, and consumers have the right to freely purchase them. Restricting distribution due to the pressure from certain groups is an act that undermines fair market order."
The pharmaceutical industry expects that the FTC's investigation could present a new opportunity. If the allegations of the KPA using power to pressure pharmaceutical companies are proven true, it could lead to expanded distribution networks and greater opportunities for pharmaceutical companies to enter Daiso stores.
Daewoong Pharmaceutical and Chung Kun Dang Healthcare have stated that they will continue to sell their health supplements at Daiso. A representative from Daewoong Pharmaceutical said, "We will continue selling our products, and we are monitoring the situation." Other pharmaceutical companies are also reportedly considering entering Daiso stores while observing the developments in this case.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
