 |
Photo = Fair Trade Commission |
[Alpha Biz= Paul Lee] Four major South Korean convenience store chains—GS25, CU, 7-Eleven, and Emart24—have avoided regulatory penalties by committing to voluntarily correct practices deemed abusive toward suppliers.
On April 21, the Fair Trade Commission (FTC) announced it had finalized a consent decision (similar to a settlement) with the chains regarding violations of the Large-Scale Retail Business Act. The FTC had been investigating claims the chains imposed excessive penalties on suppliers for delayed or incomplete deliveries.
As part of the settlement, the convenience store headquarters agreed to reduce their “missed delivery penalties”—previously up to 20–30% of the undelivered product’s value—to levels similar to those of major supermarkets (6–10%). The FTC had been investigating whether such high penalties constituted unfair trade practices.
The consent decision also includes reforms to product promotion fees. The criteria for charging new product placement fees will be adjusted in favor of suppliers. Instead of calculating from the date a product is first stocked in convenience stores, the 6-month eligibility window will now begin from the product’s initial launch in the Korean market. Suppliers will input launch dates directly into the system to ensure fairness.
Additionally, the four chains have pledged approximately KRW 8.275 billion (USD 6 million) in supplier support initiatives. This includes a KRW 3 billion contribution to a mutual cooperation fund and free access to previously paid advertising and information services worth nearly KRW 5.25 billion. Eligible suppliers will receive one of three support services based on their past payments.
The FTC will monitor compliance with the consent decision alongside the Korea Fair Trade Mediation Agency. Chains failing to implement the measures face daily penalties of KRW 2 million and potential cancellation of the consent decision, which could lead to renewed sanctions.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
