"Ensuring Fair Trade Compliance"... Lotte Chilsung Beverage Establishes Compliance Committee

[Financial News] Lotte Chilsung Beverage has established a Compliance Committee. The move is intended to thoroughly prevent potential legal risks in advance, as cases of violations of the Fair Trade Act, including collusion, have recently emerged one after another in the food and beverage industry. 
According to industry sources on the 2nd, Lotte Chilsung Beverage launched the Compliance Committee to identify and control legal risks that may arise during major decision-making and business operations. Previously, the company mainly detected and addressed possible legal violations after signing contracts with suppliers and business partners or launching new businesses. It will now strengthen company-wide compliance controls through proactive measures. A Lotte Chilsung Beverage official emphasized, "We established the Compliance Committee to implement rigorous internal controls and establish responsible management centered on the board of directors."
The food and beverage industry has recently become more alert than ever to the importance of compliance management following a series of collusion investigations. In the first half of this year alone, widespread collusion was uncovered in markets for basic food ingredients, including sugar, flour, starch and starch-based sweeteners. The Korea Fair Trade Commission imposed record fines of 671 billion won for collusion in the flour market and 747.6 billion won for collusion involving starch and starch-based sweeteners. Follow-up legal proceedings are also underway in the sugar collusion case. As astronomical fines have increased legal risks, the need for a thorough preemptive monitoring system has emerged.
Accordingly, Lotte Chilsung Beverage's Compliance Committee plans to conduct quarterly audits to determine whether each department's operations are lawful and whether the Fair Trade Act and internal regulations are being properly observed, thereby minimizing risks. The company also regularly shares domestic and international compliance issues and regulatory developments to raise employees' awareness of ethical management. In addition, it provides tailored training on the Fair Trade Act, the Act on Fair Labeling and Advertising, and the Fair Transactions in Subcontracting Act, based on the nature of employees' duties. Relevant departments, including the Legal Affairs Team, Management Improvement Team, Internal Control Team and Compliance Team, are participating in the process in an integrated manner.
Efforts to strengthen compliance and ethical management systems are spreading across the food and beverage industry. Nongshim conducts checklist-based self-inspections twice a year to prevent legal risks, establish a culture of compliance, and identify and address potential issues at an early stage. Lotte Wellfood has also established a dedicated organization for ethical management and is closely auditing whether employees comply with fair trade standards.
Meanwhile, Lotte Chilsung Beverage has taken the lead in establishing a transparent trading culture. It was the first company in Korea's beverage and alcoholic beverage industries to obtain certification for a Compliance Management System and an Anti-bribery Management System, and has applied them across all of its business sites. 

[email protected] Reporter Park Kyung-ho Reporter