KCC reverses paint price hike after antitrust probe

Painting products are displayed at a paint store in Seoul, March 25. Yonhap

KCC, a leading paint manufacturer, scrapped its plan to raise paint prices Wednesday, becoming the latest company to align with the government’s push to curb inflation.

“We decided to withdraw the plan to help ease consumers’ financial burden in line with the government’s price stabilization policy,” a company official said.

“Although our current pricing structure results in losses with each sale, we plan to explore ways to minimize losses while closely monitoring market conditions and managing our pricing policy with the utmost caution.”

KCC earlier notified its distributors of plans to raise product prices by 10 to 40 percent starting April 6, citing rising petrochemical costs following the war in Iran.

However, the company reversed its decision after the Fair Trade Commission (FTC) conducted on-site inspections last month at the Korea Paint & Printing Ink Industry Cooperative, the KCC headquarters and four other paint makers.

The antitrust regulator suspected collusion among the companies before their series of price hike announcements.

Industry officials expect other paint makers to follow KCC’s lead.

Noroo Paint & Coatings and SP Samhwa, which began selling products at higher prices last month, said they are reviewing various measures to ease the burden on customers, including price cuts.

In the food sector, several companies have already frozen or lowered product prices as the government intensifies efforts to stabilize commodity prices through investigations into alleged collusion among flour and sugar producers.

Despite a shortage of packaging materials caused by disruptions in petrochemical supply chains, those firms have been reluctant to raise prices under government pressure.

“We thank food companies for voluntarily cutting prices and many other companies for refraining from price hikes despite rising costs following the war in the Middle East,” FTC Chairman Ju Biung-ghi said Wednesday.

“We hope that the government’s efforts combined with voluntary cooperation from businesses will continue to create a strong synergy effect going forward.”

Last month, refiners also pledged to support the government’s efforts to stabilize petroleum prices after prosecutors raided their headquarters and the Korea Petroleum Association as part of a probe into suspected collusion.