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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, Oct. 16 — The Korea Fair Trade Commission (KFTC) has launched an investigation into E-Mart and Lotte Mart over allegations that the two major retailers artificially raised produce prices before participating in a government-backed agricultural discount program, misleading consumers about the actual level of discounts offered.
According to industry sources, the KFTC recently dispatched investigators to both companies to collect materials related to potential violations of the Act on Fair Labeling and Advertising, which prohibits false, exaggerated, or deceptive representations that could mislead consumers.
The two retail giants are suspected of raising produce prices prior to promotional periods, then applying government-funded discounts to create the illusion of deeper price reductions. Since 2022, the Ministry of Agriculture, Food and Rural Affairs (MAFRA) has operated a subsidy program designed to ease consumer burdens by covering up to ₩10,000 per person for 20% discounts on select agricultural products offered by participating retailers.
The probe follows findings from the Board of Audit and Inspection (BAI), which reported in a September 18 audit that several large retailers had increased prices ahead of the government’s discount events. The audit found that among 132 tracked items, prices for 45 products rose by more than 20% before being discounted.
The KFTC is reviewing whether such pricing practices constitute misleading advertising, as they may have led consumers to believe they were receiving larger discounts than actually offered.
If violations are confirmed, both E-Mart and Lotte Mart could face corrective orders and fines under the Fair Labeling and Advertising Act.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
