Pharmacy signboards are seen on a street in Seoul's Jongno District, Sunday. Yonhap

The country's top antitrust agency has begun investigations on an association of pharmacists for allegedly abusing its market power to interfere with the marketing practices of pharmaceutical companies and forcing them to give up a key sales route, in violation of the country's Monopoly Regulation and Fair Trade Act.

The Fair Trade Commission (FTC) said Monday that it has started looking into how the Korean Pharmaceutical Association (KPA) influenced Il-Yang Pharmaceutical to stop supplying health supplement products to Daiso last month. Daiso, a major retail franchise offering household and food products, gained significant popularity due to its low prices at more than 1,500 stores nationwide.

The FTC said it is searching for evidence that KPA violated the law to protect local pharmacies' market share in the country's health supplement product market. “If there happens to be such evidence, we will launch an official investigation," an FTC official said.

The FTC's involvement in the matter came after Il-Yang Pharmaceutical and Daewoong Pharmaceutical started selling their health supplement products at select Daiso stores. Il-Yang started selling nine products, including concentrated multivitamins, calcium, omega-3 and lutein. Chong Kun Dang Holdings also announced its plan to start selling its health supplement products at Daiso stores next month.

The health supplement products sold at Daiso had less packaging materials and smaller quantities of ingredients compared to the same products sold at pharmacies, allowing them to be sold at lower prices. While pharmacies sold health supplement products for prices ranging from 25,000 won ($17.18) to 30,000 won, Daiso sold the same products for 3,000 won to 5,000 won.

A Daiso store is shown in this undated photo / Korea Times file

After Daiso introduced its first health supplement products, it received a positive response, with some items selling out quickly.

However, Il-Yang decided to stop supplying to Daiso on Feb. 28.

The company's decision came after the KPA's president-elect Kwon Young-hee, scheduled to assume the role later this month, met with representatives of Il-Yang, Daewoong and Chong Kun Dang on Feb. 26 and 27. Kwon conveyed grievances from local pharmacies, which had raised concerns over pharmaceutical companies offering their products at lower prices through Daiso.

The KPA last month released a statement condemning pharmaceutical companies for creating public mistrust of local pharmacies. The association said the pharmaceutical companies, “by selling their products for cheaper prices at Daiso, caused consumers to believe health supplement products should be sold for cheaper prices than how we have been selling them.”

Some members of KPA even threatened to stop selling products made by the companies supplying their products to Daiso.

The FTC is considering clauses in the Fair Trade Act that state, “Enterprisers' organizations shall not limit market competition unfairly, limit the number of present or future market competitors, or limit business activities unfairly.”