Nonghyup Hanaro Distribution fined for unfair trade practices

South Korea's Fair Trade Commission has imposed a corrective order and a fine totaling 462 million won on Nonghyup Hanaro Distribution for violating the Large-Scale Retail Business Act.

Investigation revealed that between February and November 2021, the company improperly collected approximately 302 million won in "new product entry incentives" for 187 items that were not actually new. While industry standards define new products as those released within six months, Nonghyup Hanaro Distribution redefined "new" based on the date of entry into Hanaro Mart, allowing it to claim incentives even for products that had been on the market for up to eight years and nine months.

Additionally, the company failed to provide written contracts to 426 suppliers on time, with delays averaging 30 days. The retailer also dispatched 43 promotional staff members from 10 suppliers without establishing prior written agreements regarding working conditions, resulting in suppliers bearing approximately 108 million won in labor costs.