The Fair Trade Commission (FTC) said Monday it has imposed a total of 11.74 billion won ($8.5 million) in fines on major domestic plastic pallet manufacturers and distributors for long-running bid-rigging. It marks the first time collusion in the pallet industry has been uncovered.
According to the FTC, 18 pallet companies generated approximately 369.2 billion won ($267 million) in related sales by pre-arranging winning bidders and bid prices across 165 pallet purchase tenders conducted by 23 firms, including Lotte Chemical, Hyundai Glovis and GS Caltex, from September 2017 to April 2024, a period of six years and eight months.
Pallets are flat platform-shaped materials used for loading and transporting cargo at logistics sites. They are considered essential logistics materials in industries such as petrochemicals, animal feed and distribution.
The 18 firms caught in the case include Gold Line, Gold Line Pallettec and Hyundai Livart. The companies set bid prices with stand-in bidders through phone calls, face-to-face meetings and KakaoTalk messenger, and the stand-in bidders submitted bids at pre-agreed levels to help designated winners secure the contracts, the investigation found. Some firms shared profits from the collusion with other participating companies through a so-called "pass-through sales" method. Beyond the actual supplying company, other cartel participants issued tax invoices in the middle of the transaction to distribute a portion of the sales, preventing defections from the cartel.
"The firms caught in this case distorted prices of pallets, which are essential in logistics operations, through collusion, increasing logistics cost burdens and maximizing their own illicit gains," an FTC official said. "We plan to continue responding strictly to collusion that imposes unnecessary costs on businesses and undermines industrial competitiveness."
