Seoul Presses Firms to Hold Prices Amid Rising Costs

KCC, one of the country’s leading paint producers, announced Wednesday that it has withdrawn its previously planned price hikes, according to a statement from the company. The firm had intended to raise paint prices by between 10 and 40 percent beginning April 6, citing higher petrochemical costs linked to ongoing geopolitical tensions in the Middle East.

However, the company reversed course following increased scrutiny from regulators. Per a statement, KCC said the decision was made to help reduce the financial burden on consumers and to align with the government’s broader price stabilization policies.

A company official acknowledged the financial challenges tied to the move, noting that current pricing conditions could result in losses on each sale. According to a statement, the company plans to explore internal measures to minimize losses while carefully managing its pricing strategy in response to market conditions.

The reversal comes after the Fair Trade Commission carried out on-site inspections last month at several industry players, including KCC and the Korea Paint & Printing Ink Industry Cooperative. The regulator has been investigating possible collusion among paint manufacturers following a series of near-simultaneous price hike announcements.

Industry observers expect similar decisions from other paint makers. Noroo Paint & Coatings and SP Samhwa, which had already implemented price increases, are now reviewing options to ease consumer costs, per a statement from industry officials.

Related: KFTC Probes Paint Industry Over Suspected Price-Fixing Amid Cost Surge

The pressure is not limited to the paint sector. In the food industry, multiple companies have either frozen or reduced prices as authorities step up investigations into suspected collusion among flour and sugar producers. According to a statement from officials, companies have shown reluctance to pass on rising costs to consumers, even as supply chains face disruptions, including shortages of packaging materials tied to petrochemical supply issues.

Government officials have welcomed these developments. According to a statement released Wednesday, Fair Trade Commission Chairman Ju Byung-ghi expressed appreciation for companies that have voluntarily refrained from raising prices or have opted to reduce them despite increasing operational costs.

Per a statement, Ju noted that cooperation between the government and private sector could generate a “strong synergy effect” in stabilizing prices moving forward.

The energy sector has also come under similar pressure. Last month, major refiners pledged to support government efforts to stabilize petroleum prices after authorities conducted raids on company headquarters and the Korea Petroleum Association as part of an ongoing investigation into suspected collusion.

As inflation concerns persist, the government’s coordinated approach—combining regulatory oversight with calls for voluntary corporate restraint—appears to be reshaping pricing strategies across multiple industries.