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[Alpha Biz=(Chicago) Reporter Kim Jisun] The court judged that the Fair Trade Commission (FTC) should cancel the fine, saying that the method of calculating the 60 billion won fine imposed on SPC affiliates based on "unfair support for affiliates" is wrong.
The Seoul High Court's Administrative Affairs Department 6-2 ruled partially in favor of the plaintiffs in a cancellation suit filed by a total of five companies, including SPC Samlip, against the FTC on the 31st.
The court ordered the FTC to cancel the 64.7 billion won fine imposed on SPC Samlip and the order to ban the sale of Mildawon shares that had been imposed on Paris Croissant and Shany.
Earlier in July 2020, the FTC said three baking affiliates, including Paris Croissant, made a so-called "road tax deal" that put SPC three ribs in the middle of the process of purchasing finished products such as baking materials such as flour and bottled water from eight production affiliates, including Mildawon.
According to the Fair Trade Commission, SPC Samlip supplied 208.3 billion won worth of flour produced by Mildawon for about four years and nine months from September 2013 to June 2018, and 281.2 billion won worth of other baking materials and finished products produced by seven other production affiliates between January 2015 and June 2018.
The FTC judged that through this type of transaction, bakery affiliates bought an annual average of 210 products from SPC Samlip and provided a 9% margin ratio, and imposed a fine of a total of 64.7 billion won on SPC affiliates based on violation of the Fair Trade Act. The FTC's disposition has the nature of the first trial's judgment. The Seoul High Court will take charge of the case as SPC affiliates filed a lawsuit against the corrective order and the fine imposition order.
The court also judged that the deal was made with the intention of supporting SPC Samlip and that SPC Samlip was aware of the illegality of the deal. "Their method of trading flour is quite unusual compared to the usual trading practices of the milling and franchise bakery industries," the court said. "SPC Samlip has been guaranteed exclusive supplier status from its bakery affiliates, allowing them to form and maintain a strong business position without any competition."
"The final normal price, which the defendant (FTC) used as the basis for the calculation of fines, was mostly based on the direct transaction price, and it is difficult to recognize it as a reasonable normal price," the court said. "Even if the flour transaction (between SPC affiliates) constitutes an act of unfair support, we cannot say that the normal price calculated by the defendant is legitimate." ．
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
