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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Kyochon F&B, operator of the Kyochon Chicken franchise, has lost a lawsuit seeking to overturn corrective measures and a fine imposed by the Fair Trade Commission over unfair trade practices.
The Seoul High Court on Wednesday ruled against Kyochon F&B, upholding the FTC’s decision that the company abused its superior bargaining position by unilaterally cutting the profit margin of a distributor supplying cooking oil exclusively for its fried chicken.
The court found that Kyochon F&B held a relatively dominant position over the distributor and improperly reduced the agreed per-can distribution margin from KRW 1,350 to zero during the contract period in 2021, despite an existing annual agreement. The move caused distributors to lose an estimated KRW 700 million in expected profits between May and December of that year.
Kyochon argued that distributors earned additional income by collecting used cooking oil, but the court rejected the claim, saying it did not negate the unfair disadvantage imposed through the margin cut.
The FTC had concluded that the conduct constituted an unfair trade practice and, in October 2024, ordered corrective measures and imposed a fine of KRW 283 million. Kyochon filed an administrative lawsuit the following month, but the court upheld the regulator’s decision.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
