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| Seen above are pork cuts displayed at a Lotte Mart outlet at Seoul Station on Sept. 17. / Korea Times file |
By Nam Hyun-woo
Lotte Shopping was slapped with a 41.1 billion won ($35 million) fine for abusive practices towards its pork suppliers, the antitrust agency said Wednesday.
This is the largest fine to be imposed on a company for violation of the Act on Fair Transactions in Large Franchise and Retail Business. Before Lotte Shopping, a 22 billion won fine against Homeplus in 2016 was the largest amount.
According to the Fair Trade Commission (FTC), the retail giant's discount chain division, Lotte Mart, unfairly passed on costs from discount events to the suppliers during 106 promotion events held between July 2012 and September 2015.
The act prohibits large franchise and retail businesses from forcing suppliers to shoulder more than half of the expenses incurred from a discount event, unless there is a written agreement between the two parties in advance. Lotte Mart had no such agreements with suppliers.
The FTC also accused Lotte Mart of forcing suppliers to deploy 2,782 employees to work for the discount chain between June 2012 and November 2015. In doing so, the suppliers shouldered all of the employees' labor expenses, while some of the employees were forced to do jobs outside of their duty of managing pork products.
Along with the two charges, the FTC punished Lotte Shopping for five abusive practices.
Immediately after the punishment, Lotte Shopping said in a statement that it will file a suit with the Seoul Administrative Court, claiming the FTC's decision was based on "a misunderstanding of the retail industry."
