[Alpha Biz= Kim Jisun] OB Brewery has been sanctioned by the Fair Trade Commission (FTC) for abusing its dominant position and forcing its dealers to designate joint guarantors.

On Sunday, the FTC announced that OB Brewery would face corrective orders, including the prohibition of certain practices and the revision and removal of contract clauses, for violating the Dealer Protection Act (Article 9). OB Brewery is also required to notify its dealers about these corrective orders.

From February 2016 to the present, OB Brewery is accused of imposing a contract on all 452 of its dealers, mandating that they designate joint guarantors. As a result, a total of 644 individuals were made joint guarantors.

The issue arose because even 158 dealers, who could adequately manage the risk of outstanding payments, were forced to designate a total of 203 joint guarantors. These dealers were required to provide excessive collateral, even though they could manage the risk of uncollected payments, due to the simultaneous setting of "physical collateral" exceeding their average monthly sales and other terms such as credit limits based on the collateral ratio, delinquency rate, and sales volume.

Additionally, OB Brewery is accused of not specifying the maximum debt limits for the 622 joint guarantors of 436 dealers. This meant that, in the event of a dealer's default, the joint guarantors would be fully responsible for repaying the debt, without a clear cap on their liability.

As a result, dealers found it difficult to recruit joint guarantors, causing challenges in opening and operating their stores, according to the FTC. Among the 622 joint guarantors, 95% (591 people) were family members of the dealers' employees, and there were cases where family member signatures were forged due to the inability to find guarantors.

The FTC decided to impose corrective orders rather than stronger sanctions, considering that there were no reports of joint guarantors actually paying off the debts.

 

 

 

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