Seven Korean millers fixed flour supply prices for six years while subsidies flowed

Seven Korean flour millers — including CJ CheilJedang, Samyang Corporation and Sajo Dongaone — reached 24 agreements on flour supply prices and volumes over roughly six years, from November 2019 through October 2025, Korea's Fair Trade Commission found. The conduct sat alongside two already-sanctioned cartels in the same kitchen staples: starch and starch syrup (₩747.6bn in fines, the KFTC's largest ever) and sugar (₩408bn), both of which Samyang and CJ also took part in.

The flour scheme's signature was timing. When raw-material costs rose, the cartel agreed price increases; when they fell, it agreed five times to keep reductions minimal and delay them as long as possible. Large buyers that pushed got partial cuts; smaller clients and dealers stayed at old prices. Companies coordinated the exchange rates and raw-material figures they would cite, and even the timing of customer notices — visiting one another's offices and accompanying each other to the post office to confirm compliance.

The collusion ran straight through a government intervention: in 2022, while Seoul paid out ₩47.1bn in subsidies meant to stabilise flour prices for consumers, the millers kept to their agreements. Sajo Dongaone's sanction over the flour collusion reached ₩183.1bn, fourth-largest among food-sector penalties totalling ₩1.19 trillion for the four most-fined firms, and the KFTC ordered the companies to set prices independently without consulting competitors.

Sajo Dongaone's sanction over the flour collusion reached ₩183.1bn — fourth-largest of the food-cartel penalties that total ₩1.19 trillion combined.

The market was concentrated enough that a handful of millers could set supply prices jointly — the same small group had already been sanctioned together on starch and sugar.

The cartel's core work was downcycle management: agreeing how slowly and partially to pass raw-material savings through to customers.

Government price-stabilisation subsidies in 2022 — ₩47.1bn — were absorbed into the fixed structure instead of reaching consumers.

Compliance rituals such as shared notice timings and post-office escorts kept the ring aligned for six years, showing the collusion was managed, not occasional.

Price-fixing shows up in the downcycle, not just the upcycle: the cartel's real work was agreeing how slowly to pass savings through — while subsidies hid the effect.

Alongside the fines, the commission ordered the companies to set prices independently without consulting competitors. Assembly data obtained by Rep. Park Hong-bae shows cumulative food-cartel penalties of ₩1.19 trillion for the four most-fined firms through August 2026, with Samyang's ₩210.3bn starch-sugar surcharge waived in August under the leniency programme. The lawmaker pressed the KFTC to verify compliance with corrective measures and tighten monitoring of food-sector collusion.