Ministop Korea fined for squeezing suppliers

South Korea’s antitrust watchdog has slapped a 114 million won (US$103,100) fine on convenience store chain Ministop Korea for unfair trade practices and ordered the company to take corrective action.

The penalty against the local affiliate of Japan’s Aeon group, one of the largest retailers in Asia, comes after Ministop Korea abused its superior position to arbitrarily change contracts with its value added network (VAN) companies, the Fair Trade Commission (FTC) said.

A VAN company facilitates electronic data interchange (EDI), such as credit card approval and settlement.

“Ministop unilaterally halted dealings with two local VAN companies in February 2011 after they failed to match a proposal made by another firm that offered considerable monetary incentives to change its network partner,” the FTC said.

During the process, the convenience store chain received monetary benefits from the existing VANs that initially wanted to maintain their contracts but later baulked when the demand became excessive, it said.

The watchdog said the two VANs had accepted the change to their contracts in September 2010, which required them to pay 3.5 billion won over seven years, but when Ministop Korea asked for the signing of a revised arrangement just five months later, they rejected the call and had their contracts terminated.

The FTC said it has also asked state prosecutors to launch a criminal investigation into the case.

The watchdog said the latest action against Ministop Korea will send a warning to large retail chains that have been cited in the past for exploiting VAN companies.

“The move should help correct unfair trade practices in the EDI sector,” it said.


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