Price Fixing Alleged for Ramen NoodlesJul 26, 2013
A federal antitrust class action lawsuit claims that four South Korean companies have fixed the price of instant ramen noodles for more than a decade.
The Plaza Company, which runs the Plaza Market in Koreatown in Los Angeles, claims the Seoul-based defendants along with their U.S. subsidiaries conspired six times between 2001 and 2008 to fix prices on instant noodle products, according to Courthouse News. Prices increased roughly 54 percent.
The defendants are Nong Shim Co./Nong Shim America; Ottogi Co./Ottogi America; Samyang Foods Co./Samyang USA; and Korea Yakult and its U.S. affiliate, Paldo America.
The price-fixing conspiracy became public in July 2012, when the Korean Fair Trade Commission (KFTC) issued findings revealing that the defendants had colluded to increase prices and keep them inflated. The commission said the collusion involved at least two in-person meetings among the defendants (in 2001 and 2008), and hundreds of email communications between and among the defendants, according to Courthouse News. The four companies were ordered to pay a fine of 136 billion won, or $120 million, according to the Yonhap News, South Korea's largest news agency.
The noodle companies blame the price increases on rising costs of ingredients, including wheat flour, palm oil, and potato starch, and packaging materials, Plaza said in court documents. But Courthouse News reports that the KFTC said the price increases substantially exceeded increased costs.
Plaza seeks damages and an injunction against price fixing. The four companies have either declined to comment on the lawsuit or have not responded to requests for comment.