The South Korean Fair Trade Commission (KFTC) has begun a significant investigation into alleged price collusion involving seven major flour producers, amidst suspicions of a total market manipulation worth approximately 5.8 trillion won. This marks a notable return to the legal mechanism of 'price re-determination orders', which had not been employed for two decades. The KFTC's preliminary report indicates that these companies, including prominent entities like CJ CheilJedang and Daehan Flour Mills, have been engaging in collusive practices regarding flour sales prices and quantity distribution from November 2019 to October 2025. With these producers commanding an 88% share of the domestic flour business-to-business market, the stakes of this investigation are considerable.

The collusion was determined to violate South Korean competition laws, and the KFTC has suggested corrective measures that include potential fines amounting to up to 20% of the companies' sales related to the colluded products. Notably, the price re-determination order, recently emphasized by President Lee Jae-myung, aims to compel these companies to adjust their previously colluded prices to levels deemed fair and appropriate. The last time such an order was issued was back in 2006, making this a significant regulatory move for ensuring fair competition in critical consumer sectors.

As the investigation proceeds, the final decision regarding the sanctions and remedial actions will be determined after reviewing the companies' feedback within an 8-week period following the receipt of the investigative report. The KFTC has stressed the importance of urgency due to the direct impact of the flour collusion case on consumer prices, indicating a commitment to swift action in the face of these competitive misconduct allegations, in alignment with their regulatory mandate and consumer welfare considerations.