Violation of the Large-scale Distribution Business Act… No prior written agreement
Corrective order and imposed penalty of 468 million… “Continuous monitoring”
The Fair Trade Commission announced on the 5th that it has imposed a correction order and a fine of 468 million won on Homeplus, which passed the sales promotion cost to the supplier without prior written agreement.
According to the Fair Trade Commission, Homeplus unfairly transferred about 720 million won in promotional expenses to a number of suppliers, including Lock&Lock and Ssangbangwool, from January 2017 to December 2017.
In order to revitalize sales, Homeplus conducted 166 promotional events, including various discount events, and delayed up to 25 days without signing a contract with the supplier in advance.
This violates Article 11 (1) and (2) of the Large-scale Distribution Business Act, which prohibits the transfer of promotional expenses without entering into an agreement to bear promotional expenses with a supplier before a large-scale distribution company conducts a sales promotion event.
The Fair Trade Commission emphasized, “This case once again rang an alarm for the distribution industry about the importance of written attention, which is one of the main characteristics of the large-scale distribution industry law.”
Next, “Plan to induce the two sides to develop from an equal position to a complementary relationship through continuous monitoring of compliance with formal requirements such as written attention as well as unfairness of content in transactions between large-scale distributors and suppliers.” Explained.
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