Asung Daiso, a daily necessities store, will be fined 500 million won for unfairly passing the unsold goods to suppliers in the form of "returns."
The Fair Trade Commission (FTC) said on March 4 that it has imposed a fine of 500 million won, along with an order to correct the violation of the large-scale distribution act on Asung Daiso, an operator of Daiso.
According to the FTC, Asung Daiso returned 2.12 million products in 1,405 items (about 1.6 billion won worth), which were directly purchased from 113 suppliers between January 2015 and July 2017, to suppliers in an illegal way.
Direct purchases refer to the trade that large-scale distributors directly buy goods from suppliers, which are distinguished from "special purchase deals" in which they trade on credit on condition of returns to unsold goods.
Specifically, Asung Daiso returned 1,251 items (about 800 million won worth of returns) to 92 suppliers without the suppliers’ voluntary requests, requiring suppliers to bear all related expenses.
The Large-scale Distribution Business Act (Article 10 Paragraph 7) allows the return of unsold goods only if the supplier has presented a written request to the distributor that the return is in his or her interest.
Kwon Soon-kook, head of the FTC`s distribution and trading division, said that the commission corrected the problem of unfair returns of Daiso, a major distributor of small and medium-sized suppliers and the nation`s largest household goods store.