South Korea Penalizes Pharma Leader Celltrion for Unfair Trade Conduct
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Seoul, December 3 (NationPress) - The antitrust authority in South Korea imposed a fine of 435 million won ($309,900) on the prominent pharmaceutical company Celltrion for its engagement in unfair business practices.
This biopharmaceutical leader has been accused of providing undue advantages to its affiliate, Celltrion Healthcare, by exempting them from inventory storage fees and allowing free usage of trademark rights, as reported by the Fair Trade Commission (FTC) and Yonhap news agency.
The FTC determined that these actions compromised fair competition, yielding estimated financial gains for Celltrion Healthcare amounting to 1.2 billion won.
Despite these findings, the FTC opted not to forward the case of Celltrion's Chairman Seo Jung-jin to the prosecutors for additional inquiries.
According to Kim Dong-myung, an FTC representative, "The total benefit provided was below 5 billion won, and it remains uncertain whether the chairman had directly instructed or participated in these actions."
Previously, the FTC disclosed that among 88 major corporate groups, including 10 family-owned conglomerates, Celltrion exhibited the highest ratio of inter-affiliate transactions at 65 percent in 2023.
In other news, Celltrion's net income for the third quarter fell by 62 percent compared to the previous year, despite achieving record quarterly sales. This decline is largely attributed to the ongoing repercussions from its merger with its sales and marketing affiliate in 2023, as reported by Yonhap.
For the period from July to September, the company reported a net profit of 84.1 billion won ($60.6 million), a drop from 221.2 billion won from the previous year, according to their regulatory filing.
The operating income also decreased by 22.4 percent year-on-year to 207.7 billion won, even as sales surged by 31.2 percent, reaching a historic peak of 881.9 billion won.
For the initial nine months of the year, Celltrion's total revenue reached 2.49 trillion won, surpassing the total figure reported for the entirety of 2023, the report noted.
