South Korea Fines Dunlop Sports Korea for Price Manipulation in Golf Club Sales

South Korea’s Fair Trade Commission (KFTC) has imposed a substantial fine on Dunlop Sports Korea for engaging in illegal practices that restricted competition in the retail market. The company, which is the exclusive importer and distributor of Japan’s renowned A-brand golf clubs, faces a penalty of $1.29 million for unlawfully enforcing resale price maintenance and creating unfair trading conditions between 2020 and 2023.

According to a statement from the KFTC, the company set minimum prices for its products sold both online and offline, effectively limiting retailers’ ability to offer discounts. Retailers who disregarded these pricing policies were subject to harsh penalties, such as supply restrictions on popular golf club models, removal of financial incentives, and, in some cases, the termination of business agreements.

Dunlop’s enforcement of these pricing rules reportedly included frequent undercover inspections. The company sent disguised customers into retail stores and monitored online sales listings regularly to ensure compliance. Retailers caught violating the pricing guidelines faced swift punitive measures, which the KFTC argued eliminated price competition among dealers.

Additionally, Dunlop Sports Korea allegedly pressured its authorized dealers to prevent the resale of products to non-affiliated retailers. This tactic was intended to ensure that independent stores could not undercut the set prices, thereby maintaining uniform pricing across all outlets.

In a statement, the KFTC emphasized that such actions were a violation of South Korea’s fair trade laws, which are designed to encourage competitive pricing and prevent monopolistic behavior. The commission also pointed out that similar price-fixing practices had led to fines in the past, with a notable case in 2009 involving other golf club distributors, although Dunlop had not been penalized at the time.

Given the repeated nature of these violations, the KFTC imposed a significantly higher fine this time, with the penalty amounting to over three times the largest fine levied in the 2009 case, which totaled 400 million won (approximately $277,000).

“This ruling sends a clear message to companies that attempt to manipulate the market through unfair trade practices,” said a KFTC official. “Consumers can now expect more competitive pricing in the golf club sector.”

Source: Inside Retail