South Korea’s antitrust watchdog on Sunday fined Homeplus, the country’s second-largest discount store chain, for violating revised subcontracting rules and hurting the interests of a supplier.
The Fair Trade Commission said it slapped a 357 million-won ($321,500) fine on the company, owned by Britain’s grocery and general merchandise retailer Tesco, for compelling a local fried chicken business to lend its employees to 37 Homeplus stores across the country. The dispatching of workers took place from April 2013 through February 2014.
“Homeplus made the fried chicken company pay for all expenses related to the dispatched workers, which is in clear violation of the revised 2011 subcontractor act,” the corporate regulator said.
The rule was set up to prevent big retailers from forcing smaller suppliers to cover the expenses of sales personnel, which was common practice in the past. Such measures unfairly burdened small firms that had no choice but to comply if they wanted to sell their goods at the retail chain.
The FTC, moreover, said that Homeplus did not even ink a formal agreement in regards to the use of sales people it received from the fried chicken company.
Homeplus has 140 large discount stores across the country and reported annual sales hitting 8.93 trillion won in 2014. (Yonhap)
