South Korea's spirit maker GoldenBlue has filed a complaint against Carlsberg Group with the Korea Fair Trade Commission for allegedly violating fair trade regulations. Photo courtesy of GoldenBlue

Korean spirit maker asks anti-trust watchdog to probe Carlsberg

South Korea’s whiskey company GoldenBlue said on July 7 that it had lodged a complaint against Carlsberg Group with the Korea Fair Trade Commission (KFTC), the country’s anti-trust regulator.

GoldenBlue claims that Danish beer brand Carlsberg had violated the country’s Monopoly Regulation and Fair Trade Act during the two’s partnership over the past few years.

Starting in early 2018, GoldenBlue distributed Carlsberg beer in Korea to take a firm root here, according to the former. But the latter terminated the deal at the end of March.

Back then, Carlsberg argued that GoldenBlue’s commitment to Carlsberg had never been 100 percent fulfilled in line with the bilateral contract.

In answer, GoldenBlue asked Carlsberg to withdraw the decision and keep the five-year partnership intact to little avail.

“Carlsberg Group has continued to engage in unfair trade practices since the start of the agreement with GoldenBlue by using its superior trading position to force excessive sales targets and purchases of goods,” GoldenBlue said in a statement.

“Due to Carlsberg Group’s unfair and unilateral refusal of transactions, GoldenBlue suffered serious damage, such as the human and material costs it invested in being virtually nullified.”

To meet the “unreasonable sales targets,” GoldenBlue contended that it had shelled out big bucks so that its operating expenses amounted to a half of its total net sales between 2018 and 2021.

Confident of long-term commitment between the two, it also hired a significant number of people and set up a dedicated organization.

“This complaint with the KFTC is the minimum defense that small domestic company can act against global companies,” a GoldenBlue official said.

“Not only has it forced excessive sales target and purchase of products during the contract period, but it has also given hope-torture to extend the contract using superior position.”

“Behind the scenes, pre-work for termination of existing contracts, such as the establishment of a domestic corporation for direct distribution, is all a disregard for domestic companies and an apparent abuse of power by multinational companies.”

The official said that Carlsberg had started acting strangely in late 2021 by offering unusual conditions for extending the contract and giving short-term extensions of only one or two months.

Carlsberg Korea was founded in late 2022, and it began selling Carlsberg 500ml products at Korean convenience stores and other places this May, according to GoldenBlue.

When contacted after the contract finished in March, Carlsberg blamed GoldenBlue for the collapse of the partnership.

“At no point in time has Carlsberg ignored any requests from GoldenBlue or unreasonably pushed GoldenBlue to perform beyond the contract requirements. Our contract expired in 2021,” a Carlsberg official said.

“Subsequently, Carlsberg has tried, through several short-term extensions of the contract, to explore the possibility of entering a new long-term agreement. Unfortunately, it has not been possible to reach a long-term agreement.”

Carlsberg disagrees

In answer, Carlsberg came up with a different story, branding allegations and demand for compensation from GoldenBlue ill-founded.

The company also countered that it had tried to talk with GoldenBlue regarding the conflicts.

“It is simply not true when Golden Blue states that we have not provided any response regarding the compensation requested by GoldenBlue,” a Carlsberg official said in an e-mail interview.

“Nor that we are not willing to engage in a discussion. Carlsberg has invited GoldenBlue to discuss the practical and financial arrangements resulting from the discontinuation of the collaboration, but so far, Golden Blue has rejected such discussions.”