MAFRA Revokes Nonprofit Status of Korea Egg Producers Association: "Egg Price Notification Undermined Fair Order"

Nonprofit Status Revoked for Violating Approval Conditions and Price Collusion

"No Impact on Egg Production or Distribution... Stricter Oversight for Fair Trade Order"

Yonhap News Agency

The government has revoked the nonprofit corporation license of the Korea Egg Producers Association, which has been continuing the so-called "egg price notification" by informing its members of farm-gate egg prices. This action was taken because the association was found to have violated the conditions of approval granted at the time of its establishment and to have restricted fair price competition, thereby undermining the public interest.

The Ministry of Agriculture, Food and Rural Affairs announced on July 29 that it had cancelled the nonprofit corporation license of the Korea Egg Producers Association.

This measure was taken in accordance with relevant laws, based on the determination that the association had violated the conditions of approval by persistently setting and notifying members of egg farm-gate prices, and had harmed the public interest by violating the Fair Trade Act.

When granting nonprofit corporation status to the association in 2023, the Ministry of Agriculture, Food and Rural Affairs required compliance with the Fair Trade Act and explicitly prohibited the determination and notification of egg farm-gate prices. However, the ministry explained that the association continued to notify its members of these prices until January 21 of this year, in violation of the conditions set at approval.

The decision by the Fair Trade Commission also influenced this administrative action. In June, the Fair Trade Commission determined that the association’s conduct of setting and notifying farm-gate prices effectively constituted cartel behavior that restricted price competition. As a result, the commission imposed corrective orders and fines for violations by the business group. The Ministry of Agriculture, Food and Rural Affairs stated that this clearly established the association’s actions as detrimental to fair social order.

The ministry noted that it completed all administrative procedures prior to cancelling the association's nonprofit license, including advance notification, opportunities for the association to present its views, and a hearing. After reviewing the association’s arguments, the ministry concluded there were no grounds to overturn the violation of approval conditions or the Fair Trade Commission’s judgment. Accordingly, the ministry determined that the association had violated the prerequisites for corporate establishment and had harmed the public interest, and thus revoked the license.

The ministry emphasized that, as a matter of principle, prices should be freely determined through competition between producers and sellers in the market. If a specific group predetermines prices to be shared with its members, it may weaken price competition and lead to negative outcomes for consumers. Currently, the Livestock Products Quality Evaluation Institute investigates and provides actual farm-gate transaction prices for eggs, and the government will continue to improve the system to enhance the reliability and usability of transaction information.

The ministry added, “This administrative action concerns only the licensing status as a nonprofit corporation and does not directly affect egg production or distribution,” and continued, “We will further strengthen oversight and supervision to enhance the public interest and accountability of producer organizations, establish a fair trading environment, and ensure stable egg supply management.”

This content was produced with the assistance of AI translation services.