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Namyang Dairy May Share Some Profits with Distributors

14 January 2020

SOUTH KOREA - Namyang Dairy will share profits with its distributors in an effort to avoid being penalized by the antitrust agency.

The Fair Trade Commission (FTC) said Monday that Namyang Dairy has filed a tentative consent proposal in regard to its abuse of companies in its independent sales network in 2016.

A consent decision would allow the case to be closed without further penalty once the FTC accepts the voluntary corrective measures. It also means that the company would plead guilty to the accusation.

According to the FTC, the dairy company submitted corrective measures that include not forcing the distributors to accept a lower commission rate without their consent while keeping the rate above average of other dairy companies. It will also pay extra to distributors supplying milk to Nonghyup’s Hanaro Marts, which are located in remote areas, or those that generate small monthly revenue.

Additionally, the dairy company will create a win-win contract with the distributor’s council to provide discounts and activities and while providing 2 million won ($1,730) every month to fund the council for the next five years.

The company will share 5 percent of operating profit generated from supplying to Nonghyup.

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Source: Korea JoongAng Daily

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