The Fair Trade Commission's intensive investigation planning unit, once known as the "grim reaper" of corporate Korea, has set its sights on the food industry as its first target since the unit's revival. The unit will examine whether processed food makers colluded on products closely tied to daily life, including kimchi, tofu and instant rice. Business groups have voiced concern that the move could chill even normal corporate activity, as happened in the past. The unit's predecessor, the FTC's investigation bureau, was launched in 1998 during the International Monetary Fund crisis and abolished in 2005 under the Roh Moo-hyun administration, before being revived this year after 21 years.
The FTC's intensive investigation planning unit dispatched investigators to food companies including Daesang, Ottogi and CJ CheilJedang (097950) on the 14th to begin on-site inspections.
The commission is looking into six processed food categories: kimchi, tofu, cooking oils and fats, gift sets, instant rice products and fermented sauces. The FTC is reported to be examining whether the companies discussed product prices or the timing and scale of price increases in advance, dating back to 2018. Suspected resale price maintenance practices, believed to have taken place since 2020, are also under review. The central question is whether manufacturers restricted discount competition by requiring distributors not to sell products below certain prices.
The FTC had previously tightened enforcement by investigating alleged collusion involving raw materials used in food production, such as sugar, flour and starch sugar. With the scope now widened to processed foods bought directly by consumers, any confirmed violations could send ripples across the food industry.
This marks the first on-site inspection since the intensive investigation planning unit formally launched on the 1st of this month. The unit is a specialized organization newly restructured this year to concentrate on collusion affecting household costs, platform monopolies and large-scale, complex cases. A previous seven-member intensive investigation team was expanded into a bureau-level organization comprising three divisions and about 40 staff.
Even before the unit's launch, the FTC had said it would prioritize collusion that drives up household prices. FTC Chairman Joo Byung-ki identified the unit as the centerpiece of the commission's work in the second half of the year, saying it would "swiftly and intensively inspect unfair practices in areas closely connected to people's daily lives." He added that "rooting out foul play that holds back the livelihoods of low- and middle-income households and restoring distorted market prices is the surest policy for household welfare."
The unit's launch also draws attention as the restoration of a dedicated investigative arm at the FTC. The former investigation bureau, established in 1998, earned the nickname "grim reaper" for probing improper intra-group transactions at large conglomerates until its abolition in 2005. Its functions were later dispersed among the market surveillance bureau and the cartel investigation bureau. With this year's launch of the intensive investigation planning unit, a body dedicated to large-scale planned investigations has been assembled again. The unit will take over some functions of the former investigation bureau while handling serious unfair practices and large-scale, complex cases involving large conglomerates, platforms and monopolies in sectors tied to household costs. As a result, cases involving alleged abuse of market dominance by major platforms such as Coupang, NAVER, Kakao and Baedal Minjok could also fall under the unit's purview.
The FTC has placed three intensive investigation officers under the unit, with the investigation management officer overseeing everything from probes into cases deemed to require intensive scrutiny to corrective orders, the imposition of fines and verification of compliance. Choi Jang-gwan, head of the conglomerate surveillance bureau, was appointed as the unit's first chief. The unit is a temporary organization with a two-year mandate running through 2028.