South Korea's small printing companies called for emergency financing and tax relief, saying price fixing by large paper manufacturers has deepened their financial distress.
The Korea Printing Cooperatives Federation and 11 regional cooperatives held a news conference on the 20th at the National Assembly Communication Building in Seoul's Yeongdeungpo district with Democratic Party lawmakers Lee Kang-il and Song Jae-bong, both members of the party's committee on livelihood issues, industry officials said on the 21st. The groups urged the government to draw up a comprehensive package to help victims of the paper price cartel recover and to strengthen the printing industry's competitiveness.
The federation said paper selling prices jumped 71% on average as a result of roughly four years of price fixing by large paper makers. It estimated total damage to the printing industry at 520 billion won ($365 million), with 4,000 small printing companies at risk of closing.
Park Jang-sun, chairman of the Korea Printing & Information Industry Cooperatives Federation, said the Fair Trade Commission imposed about 338 billion won in fines on the large paper makers, but those companies had about 194.2 billion won waived under the leniency program for self-reporting, while small printers that took the direct hit received no compensation at all. "Sanctions on large companies alone cannot restore the damage," he said. "The government and the National Assembly must urgently put together substantive recovery measures so that the affected companies can get back on their feet."
Their specific demands included efforts by large companies to restore damages and pursue mutual growth with printers; a government survey of affected businesses and effective recovery measures; emergency financing and tax support for affected firms; improvements in paper trading practices and public procurement; and support for adopting digital and eco-friendly equipment and facilities.
Min Byoung-dug, a Democratic Party lawmaker who chairs the party's committee on livelihood issues, said some large paper companies raised prices again without prior notice despite mutual growth agreements. "In particular, even the Fair Trade Commission's order to redetermine prices has been suspended through a request for an injunction, leaving small printing companies bearing a distorted price burden," he said. Min called on the commission to share its investigation records with affected businesses, introduce a class action system, establish a system for estimating damages and create a fund for compensating victims.
Lee said he had sponsored a bill to revise the Fair Trade Act centered on expelling repeat cartel offenders, because setting up substantive national-level relief for victims is urgent. "We need comprehensive support measures, including a new victim relief fund, expanded tax benefits and retroactive deduction of losses, and more realistic standard unit prices in public procurement," he said.