Mr.Pizza franchise fined $302,000 for unfair biz practice by regulator
Fair Trade Commission / Yonhap
Korea's antitrust regulator said Tuesday it has decided to slap a fine of 400 million won ($302,000) on Mr.Pizza, a local chain operator, for obstructing the operations of its rival.
The punitive action against Mr.Pizza came in response to the company's interference with Pizza Union Coop's operations, including disrupting the supply of ingredients, the Fair Trade Commission said.
Pizza Union Coop was founded by individuals who had previously operated Mr.Pizza stores but left the franchise following their experiences of disagreements with the market's second-largest player.
In 2017, Mr.Pizza directly opened new locations near Pizza Union Coop's stores and rolled out massive discount promotions.
The regulator said it was evident that Mr.Pizza opened its directly controlled stores with the intention to obstruct the operation of Pizza Union Coop, as it previously opened such shops only in busy areas, including Gangnam in southern Seoul.
The company also filed a lawsuit against the founder of Pizza Union Coop for defamation and exerted influence on ingredient suppliers to cut off shipments to the newly established firm.
"Due to such actions of Mr.Pizza, Pizza Union Coop faced hurdles in developing a new menu and securing the supply of ingredients, as well as managing its stores or recruiting new owners," the FTC said.
In 2017, Mr.Pizza saw its sales reach 81.5 billion won with 311 stores, standing as the country's No. 2 player. Domino's topped the list with 219.7 billion won with 442 stores.
Mr.Pizza, meanwhile, stood at sixth place with sales of 32.2 billion won in 2021, with 217 shops under operation. (Yonhap)