South Korea Fines Ready-Mixed Concrete Cartel for Price Fixing in Gwangyang

Key Takeaways

• Cartel Penalties Imposed: South Korea’s competition watchdog fined seven ready-mixed concrete manufacturers approximately $1.7 million (KRW 2.239 billion) for colluding on prices and sales volumes in the Gwangyang area.
• Two Years of Coordinated Conduct: The companies jointly fixed prices and allocated sales volumes from May 2021 to September 2023, eliminating price competition in the private-sector construction market.
• Prices Raised in Lockstep: Delivery prices for a standard concrete specification were increased three times over the period, with firms acting collectively rather than competing independently.
• Coercive Tactics Used: When construction companies resisted higher prices, the firms threatened to suspend plant operations, leaving buyers with no realistic alternatives.
• Market-Wide Impact: The cartel controlled 100 percent of the local private-sector market, amplifying the downstream impact on construction costs and competition.

Deep Dive

South Korea’s competition watchdog has fined seven ready-mixed concrete manufacturers and sellers for running a coordinated price-fixing and market-allocation scheme that effectively shut down competition in the private construction market in the Gwangyang area.

On February 3, the Korea Fair Trade Commission said it had imposed corrective orders and administrative fines totaling approximately $1.7 million (KRW 2.239 billion) on the companies. The sanctions were issued by the Gwangju Fair Trade Office, which led the investigation.

According to the regulator, the seven companies (Dongyang Ready-Mixed Concrete, Korea Ready-Mixed Concrete, Gwanghyeon Ready-Mixed Concrete, KW, Seohung Industry, Jungwon Industry, and Jeonguk Industry) stopped competing on price as their business conditions deteriorated, citing rising costs for cement, transportation, and other inputs.

Rather than adjusting prices independently, the companies allegedly agreed to move together. From May 2021 through September 2023, executives and employees met repeatedly to discuss conditions in the local ready-mixed concrete market and coordinate their pricing strategy for private-sector customers, including construction firms and individual business operators.

The KFTC found that the companies jointly decided on a uniform “discount rate” applied to a shared base price list for ready-mixed concrete deliveries. While described as a discount under industry practice, the regulator said the arrangement effectively fixed the final selling price across the market.

Three Coordinated Price Hikes

Over the two-year period, the cartel raised delivery prices three times for a commonly supplied concrete specification (25-24-150):

• June 2021: Prices increased to approximately $56 (KRW 72,400)
• April 2022: Prices rose from about $56 (KRW 72,400) to $66 (KRW 86,100)
• January 2023: Prices increased again to roughly $70 (KRW 91,200)

When construction companies pushed back, the seven firms allegedly responded with a blunt ultimatum, threatening to halt operations at their ready-mixed concrete plants unless buyers accepted the proposed prices. The regulator said this left customers with no practical alternative suppliers.

Allocating Sales, Not Just Prices

The investigation also uncovered efforts to lock the cartel in place beyond pricing. The companies agreed on sales-volume allocation principles, such as prioritizing nearby customers, and exchanged sensitive information about customers and sales volumes.

This coordination took place through in-person meetings and a group chat on a messaging app. Firms that exceeded their assigned sales volumes were pressed to fall back in line, while companies that had already hit their targets refused to enter into new or additional supply contracts. The KFTC said these measures further eliminated any remaining competitive pressure.

The regulator described the case as particularly serious because the seven companies collectively held a 100 percent share of the private-sector ready-mixed concrete market in the Gwangyang area. The conduct affected an intermediate construction material with knock-on effects across downstream industries, amplifying the impact of the cartel on construction projects and costs.

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