The Fair Trade Commission (FTC) has issued corrective orders and imposed a total of 2.239 billion won in fines on ready-mix concrete manufacturers and sellers in the Gwangyang area of South Jeolla Province. The penalties were levied for unfair competition practices, including jointly raising prices and mutually allocating supply volumes to regional customers.
The FTC announced Wednesday following a subcommittee review that the companies' actions constituted collusion prohibited under the Monopoly Regulation and Fair Trade Act. The seven companies involved are Goryeo Remicon, Gwanghyun Remicon, Dongyang Remicon, Seoheung Industrial, Jeonkuk Industrial, Jungwon Industrial, and KW, with individual fines ranging from 268 million won to 432 million won.
According to the FTC, the seven companies engaged in collusion for approximately two years from May 2021 to September 2023 through meetings among sales executives. As rising raw material prices and transportation costs worsened their business conditions, they aligned their delivery price standard tables and discount rates to specific levels to avoid price competition.
The seven companies also raised delivery prices three times over the two-year period. When local construction companies objected, they threatened to shut down their plants if the prices were not accepted. They exploited the nature of ready-mix concrete, which must be delivered to construction sites within hours of production, making it difficult for construction companies to use suppliers from other regions.
As a result, the per-cubic-meter price of ready-mix concrete, which had previously varied among the seven companies, was unified at 72,400 won from June 2021. The companies subsequently raised the price to 86,100 won per cubic meter in April 2022 and to 91,200 won in January 2023. To solidify their collusion, they established volume allocation principles such as prioritizing supply to nearby operators and refused new or additional deliveries to companies that exceeded predetermined volumes. While nine companies comprising the entire Gwangyang ready-mix concrete market participated in the collusion, two have since closed and were not subject to sanctions.