The signboard of Namyang Dairy’s headquarters building. yunhap news.
In order to increase sales of their own milk powder, milk powder companies that loaned money at low interest rates or provided goods for free to obstetrics and gynecology hospitals and postpartum care centers were sanctioned.
On the 11th, the Fair Trade Commission imposed a correction order and a fine of 144 million won on Namyang Dairy, which provided a low-interest loan to an obstetrics and gynecology hospital to use its milk powder.
As a result of the FTC investigation, Namyang Dairy lent a total of 14.36 billion won at an annual interest rate of 2.5 to 3.0% to 21 obstetrics and gynecology hospitals and 4 postpartum care centers from August 2016 to September 2018. This is a minimum of 0.50 percentage points and a maximum of 1.01 percentage points lower than the average lending rate of banks at the time.
The Fair Trade Commission decided to impose a correction order and a fine of 10 million won on Maeil Holdings (formerly Maeil Dairy), which provided goods free of charge to obstetrics and gynecology hospitals and postpartum care centers.
From July 2012 to November 2015, Maeil Holdings provided medical devices, electronic products, and furniture for free to 16 obstetrics and gynecology hospitals and one postpartum care center, or provided interior/advertising expenses for approximately 15903 million. It provided economic benefits in the scale of Rs.
As a result of a survey of obstetrics and gynecology and postpartum care centers that borrowed money from Namyang Dairy at low interest, 22 out of a total of 25 found that Namyang Dairy’s milk powder was used alone. In the case of Maeil Holdings, 10 out of 12 obstetricians and gynecologists who responded to the survey used only Maeil Holdings’ formula alone.
The Fair Trade Commission said, “Since mothers are more likely to continue to use the formula they received from obstetrics and gynecology centers and postpartum care centers after discharge, the effect of low-interest loans and free supplies will also affect mothers’ choice of formula, so the possibility of enticing customers to use formula is recognized.”