Namyang Dairy edited its distributors' orders for years — the fine came to ₩12.5bn

Namyang Dairy, Korea's largest dairy company with annual sales around ₩1.3tn, moved its products through independent distributorships. From 2007 until May 2013, the Fair Trade Commission found, it forced purchases on 1,849 distributors — the great majority of all of them — allocating products they had never ordered or did not handle, and shipping stock whose expiry dates were close. Of the 71 items the company produced, the commission secured evidence of this pushing-out (밀어내기) in 26 of them.

The mechanics sat in the software. Sales staff in Namyang's 18 branch offices managed a target for each distributorship, and when a distributor fell short, pushing followed. Orders were closed first and the sales representative could then alter the quantity. From September 2010 the electronic ordering system, PAMS21, was changed so that distributors could no longer retrieve their own original order — leaving nothing to compare the company's final figure against. Returns were tightly restricted, so the stock that arrived was sold to acquaintances, dumped at low prices or thrown away.

Wages travelled the same route. Namyang planned the dispatch of promotion staff to large retailers such as E-Mart and effectively employed and managed them, yet shifted an average of 63% of their pay onto distributors without prior agreement. In 2012, of 397 staff dispatched to big retailers, Namyang bore ₩2bn in labour costs and passed ₩3.4bn on to the agencies. A distributor's consignment commission was 8.5% of the related sales, so the transfer left almost no margin. The commission put the damage from wage shifting alone at about ₩17bn since 2008.

On 8 July 2013 the commission announced corrective orders, a surcharge and referral to the prosecutors under Article 23(1)(4) of the Monopoly Regulation and Fair Trade Act — abuse of a superior position in trading. It recorded that Namyang had taken legal advice and run internal reviews which told it the arbitrary order allocation was unlawful forced purchasing, and had carried on regardless. The resolution of 14 October 2013 set the surcharge at ₩12,464,000,000. Estimated damage to distributors ran from ₩120bn to ₩210bn.

₩12.46bn surcharge and criminal referral in October 2013, an estimated ₩120–210bn of damage to 1,849 distributors, and a nationwide consumer boycott.

Targets were set per distributorship at 18 branch offices, and missing one triggered pushing rather than a conversation about demand.

Orders were closed before the company's own figure was entered, and from September 2010 the system hid the distributor's original order entirely.

Excess stock from minimum production batch sizes and failed demand forecasts was treated as a distributor's problem, not a manufacturing one.

Legal advice and internal review said the allocation was unlawful forced purchasing; the practice continued for years afterwards.

Promotion staff Namyang planned, hired and managed were billed to agencies that had never agreed to pay for them.

A sales target met by editing the customer's own order is not a sale. Once the system hides the original order, the audit trail is gone and every shipment becomes evidence.

Namyang said it regretted the old practices and had corrected them all. The commission ordered it to stop pushing and wage shifting, to rebuild the ordering system so the first order, every change with its reason and the final quantity are recorded and kept for five years, and to report the changes within 90 days. Executives faced further referral to the prosecutors. After the case went to court, the surcharge was recalculated and re-imposed by KFTC resolution 2016-121 of 2 May 2016. Boycott organisers called ₩12.46bn a soft sanction against ₩1.3tn of annual sales.