Korea’s Fair Trade Commission (FTC) is soon forecast to impose harsh disciplinary action on Amorepacific, which was embroiled in an unfair trade controversy over using forceful sales tactics against door-to-door sales distributors

June 16, 2014 Leave a comment

Amorepacific likely to face hefty penalty

Park Yoon-soo

2014.06.10 17:54:36

The Fair Trade Commission (FTC) is soon forecast to impose harsh disciplinary action on Amorepacific, which was embroiled in an unfair trade controversy over using forceful sales tactics against door-to-door sales distributors last year. 
The FTC’s Seoul office has recently wrapped up investigation into whether Amorepacific, South Korea’s top cosmetics company, engaged in unfair trade and submitted the result as an agenda for a small meeting of the FTC, the commission said Tuesday. The FTC sent the report on its probe to Amorepacific and is slated to set a date for review once the cosmetics company submits its position within two weeks.
The regulator could levy dozens of billions of won ($1=1,016.30) in fine on Amorepacific, as the cosmetics company’s violation of fair trade has similarities to that of Namyang Dairy Products, which became a precedent for the FTC’s punitive action.
The FTC determines a fine based on factors to raise or reduce penalty such as sales generated by a violation and details and period of the violation. It was not disclosed how much sales Amorepacific earned from the misdeed, but the company gained 3.8 trillion won ($3.8 billion) sales last year, over three times 1.2 trillion won of the dairy firm. Amorepacific stirred a storm last year when a recording was released, revealing that the company’s employees from the headquarters used foul languages against distributors who did not meet the sales quota and demanded them to give up on running the distribution business.

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