[News Today] “CJ FRESHWAY EXPLOITED MERCHANTS”

[LEAD]
CJ Freshway, a major division of CJ handling food distribution, faces penalties from the Fair Trade Commission. The firm pledged co-existence with local small merchants but ended up seizing their profits.

[REPORT]
CJ Freshway debuted in the local food distribution market in 2009.

The company publicized itself as one that could advance distribution methods. But, it was faced with opposition from local merchants.

As concerns arose over encroaching on local businesses, CJ Freshway set up Fresh One jointly with local merchants and promised to promote co-existence with them.

But later, it bought their stake.

The Fair Trade Commission believes the company did that to get rid of small merchants because it viewed them not as partners for co-existence, but as obstacles for its business.

Cha Nam-soo / Korea Federation of Micro Enterprise
They did not sell their stake at their own will. They had no other choice.

The firm also supported Fresh One with its own personnel and labor costs for over 12 years.

The FTC has concluded that providing professional workforce and wages to Fresh One, a rival of local small businesses, is unjust.

Yoo Sung-wook / Fair Trade Commission
The personnel support was used to exclude small businesses and exploit profits
under the guise of coexistence.

The FTC added that CJ Group was proactively and systematically involved in pushing out local merchants.

The commission has decided to levy a fine of 24.5 billion won, or around 18 million dollars, on CJ Freshway and others.

CJ Freshway says there is more evidence that its joint business with local distributors was based on mutual agreement, and plans to seek a reevaluation through legal action.

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