Flour on display at a hypermarket in Seoul in May. The image is not directly related to the article. [Yonhap]
Flour on display at a hypermarket in Seoul in May. The image is not directly related to the article. [Yonhap]

A damages lawsuit has been filed against seven domestic flour millers sanctioned by the Korea Fair Trade Commission for colluding to fix flour supply prices.

The class action center of law firm LKB Pyeongsan announced Wednesday that it filed the suit on behalf of 12 Chinese restaurants in Seoul and Gyeonggi Province against seven domestic flour millers on Sunday, seeking compensation for losses caused by the cartel.

According to LKB Pyeongsan, the plaintiffs, including a restaurant owner identified only as A, purchased flour through wholesalers between November 2019 and October last year, spending between about 10.47 million won ($7,140) and 99.54 million won each. The plaintiffs said "flour is a core ingredient for Chinese restaurant owners, used in dishes such as jjajangmyeon, mandu and sweet-and-sour pork," adding that "as flour prices kept rising, we had no choice but to raise menu prices, and we had to bear the risk of falling sales and losing customers."

The plaintiffs initially filed a partial claim of 1 million won per plaintiff and sought joint liability from all seven millers involved in the cartel. They plan to increase the claimed amount after analyzing actual purchase records and normal market prices.

Earlier in May, the Korea Fair Trade Commission found that the seven millers had agreed on flour supply prices and volumes 24 times over roughly six years, imposing a combined fine of 671 billion won. Flour selling prices rose between about 38 percent and 74 percent compared with levels at the start of the cartel period.

Jeong Tae-won, an attorney at LKB Pyeongsan, said "the burden created by the cartel among companies with oligopolistic market power was passed on to small business owners and consumers," adding that he hoped "the companies will actively negotiate with affected businesses to reach a swift agreement and offer compensation, rather than dragging out litigation by contesting every issue."

LKB Pyeongsan previously filed a separate damages suit against CJ CheilJedang, Samyang and TS over a sugar price-fixing cartel, representing confectionery manufacturers.


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