By Ryu Jin
Staff Reporter
South Korean beef cattle breeders were found to have forced local feed dealers not to provide feedstuff for imported cattle raisers, the first illicit business practice committed by a domestic industry to counter expected damage from freer trade and the opening of markets.
According to the Fair Trade Commission (FTC) Sunday, the Hanwoo Association exerted undue influence on feed distributors as part of its efforts to avoid fair competition with imported cattle breeders and protect the local industry.
Comprising 125 branches in nine provinces and with over 14,000 members across the nation, the association is an organization established to promote the sale of Korean beef cattle, often called ``hanwoo.’’
FTC officials have been investigating the association since last August, when the state antitrust regulator was first informed of the alleged business irregularities.
Local chiefs of the association held an executive meeting on June 20 last year to discuss such problems as the South Korea-United States free trade agreement (FTA) and cattle imports from New Zealand, according to the officials.
While the participants made a clear objection to the imports of beef cattle in a press conference, they also decided in the meeting to block the supply of feedstuffs to put pressure on those who raise imported beef cattle.
``The association sent official letters to major feed distributors asking them to stop providing feed to the farmhouses that breed imported cattle,’’ one of the FTC officials said on condition of anonymity.
``Feed dealers might have not been able to simply ignore the demands of the association, given that it is a large, powerful group and also hanwoo accounts for some 90 percent of the beef cattle raised in the country,’’ he added.
Officials said the FTC instructed the hanwoo breeders to stop the unfair business practice as it jeopardized the imported cattle ranchers’ business activities.
Since the liberalization of the beef market in 2001, some 10,000 live cows and bulls have been imported from foreign countries, mostly from Australia.
Officials said the FTC plans to strengthen its actions on unfair business practices by domestic industries in various markets, including the livestock market, if they try to stop cross-border competition since the conclusion of the Korea-U.S. FTA (KORUS FTA).
FTC Chairman Kwon Oh-seung, in particular, has stressed in recent weeks that his commission will ``strengthen law enforcement against business irregularities that impede the efficacy of the KORUS FTA.’’
South Korean farmers, civic groups and anti-globalization activists have opposed the ratification of the KORUS FTA and the resumption of beef imports from the U.S.
Domestic stockbreeders have also protested the government’s move to resume beef imports from the U.S. Beef sells in South Korea at about five times the price of that in the U.S., and six in 10 South Korean consumers are willing to buy U.S. beef, according to recent surveys.
Currently, South Korea permits the import of U.S. beef that is boneless and from cattle under 30 months old. But officials say the country would have to resume imports of all U.S. beef products, even those with bones, from September.