Korea’s flour and sugar cartel case intensifies scrutiny of high bread prices
South Korean prosecutors have indicted 16 companies and 36 individuals over alleged collusion involving flour, sugar and other essential goods. The case has intensified scrutiny of bakery prices after a comparison put a croissant at 2,281 won in Korea and 702 won in Japan.
Price gap draws political attention
South Korea’s high bakery prices are facing renewed scrutiny after prosecutors brought a major criminal case over alleged collusion in flour, sugar and other essential-goods markets. The debate has been sharpened by a comparison reported by OhmyNews: a croissant priced at 2,281 won in Korea cost 702 won in Japan. The figures do not by themselves establish why the products differ in price, but the gap has focused attention on the cost of key ingredients supplied to bakeries and food manufacturers.
On February 5, President Lee Jae-myung said an examination had found that bread prices in Korea were extremely high compared with those in other countries. His intervention came as the prosecution of flour and sugar suppliers was already raising questions about competition in upstream food markets. The central issue for manufacturers and consumers is whether alleged coordination over prices and supply volumes helped keep input costs above levels that would have prevailed under stronger competition.
Prosecutors target companies and executives
According to a February 9 legal update from Bae, Kim & Lee, the Seoul Central District Prosecutors’ Office indicted 52 defendants on February 2: 16 corporate entities and 36 individuals, including chief executives and senior officers. They were charged with alleged violations of South Korea’s competition law in cases linked to flour, sugar and other essential goods. The law firm said prosecutors acted before the Korea Fair Trade Commission completed its own investigation and referral process, using the criminal leniency system to intervene directly.
Maeil Business Newspaper reported that prosecutors estimated the alleged flour cartel at 5.9913 trillion won and the alleged sugar cartel at 3.2715 trillion won. It said sugar producers were investigated over claims that they agreed in advance on the timing and scale of price adjustments between February 2021 and April 2025. CJ CheilJedang and Samyang Corp. were among the companies named in reporting on the sugar case. The allegations remain subject to court proceedings, and an indictment is not a finding of guilt.
Enforcement could alter supplier practices
The case may affect more than retail bread prices. Flour and sugar are basic inputs for industrial bakeries, confectionery producers, beverage companies, restaurants and smaller independent shops. If the courts uphold the allegations and competition increases, buyers could gain more leverage over contract prices and supply terms. However, the available evidence does not quantify how much of the Korea-Japan croissant price gap comes from ingredients rather than wages, rent, distribution, product specifications or retail margins.
The enforcement environment is also becoming tougher. Bae, Kim & Lee said the Korea Fair Trade Commission plans to seek legislation raising the maximum proportional surcharge for collusion from 20% to 30% of relevant sales and the fixed maximum from 4 billion won to 10 billion won. Prosecutors have argued that corporate fines alone provide insufficient deterrence and can be passed back to consumers through higher prices. For food suppliers, processors and bakery groups, the immediate consequences are greater personal exposure for executives, closer scrutiny of competitor contacts and higher risk around exchanges of price, volume and contract information.
