Korea: Hearing pushed back in Cargill challenge on cartel claims

By Jane Byrne contact

- Last updated on GMT

© istock/8vFanl
© istock/8vFanl
Cargill says a hearing in the appeal process it initiated in the Seoul High Court against claims it participated in a feed cartel in South Korea has been postponed.

“We were supposed to have our hearing on September 27; however, on September 22, the 6th Division issued a decision to postpone. We do not know our new date. We do know that the hearings for other companies that were pending before the 6th​ Division have also been postponed,” ​a spokesperson for Cargill told FeedNavigator.

In October 2015, the US agribusiness giant formally challenged the findings of South Korea’s competition authority that it was part of a feed price-rigging group over a number of years. 

Background to appeal  

Cargill is seeking to revoke a Korea Fair Trade Commission (KFTC) administrative ruling that it violated that country's Monopoly Regulation and Fair Trade Act.

July 2015 saw the KFTC levy fines totaling US$68.7m at Cargill Agra Purina and 10 other feed companies including CJ Cheijedang and Jeil Holdings over what it alleged was their collusion on pig, cattle and poultry feed prices. 

The 11 feed companies fined control 43% of the South Korean market with the KFTC contending they took part in a cartel to control feed prices between October 2006 and November 2010, to the detriment of livestock producers’ profit margins.

The South Korean trade watchdog said domestic feed price jumped 60% during those years.

Harim Holdings and Farmsco were among the other feed firms fined over the unfair trade practices. 

Cargill said it has consistently maintained that there was never an agreement between it and its competitors to coordinate prices in Korea’s highly competitive and fragmented animal feed market, and that its Korean animal feed customers were not harmed.

Market presence 

Cargill first entered South Korea in 1956 and set up its first feed mill there in 1969. It subsequently acquired Agribrands Purina Korea in 2001.

Cargill Agra Purina currently operates four mills in the Asian country, with capacity of up to 2m metric tons of livestock feed annually.

In November 2015, Cargill’s largest livestock feed mill in the world went online in South Korea.

 

 

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