ROK Drop

Avatar of GI KoreaBy on May 7th, 2012 at 5:20 pm

The North Face Company Fined For Price Fixing In Korea

Does anyone know if stopping retailers from offering discount prices is illegal anywhere else in the world?

The U.S. outdoor brand that has dominated the South Korean market for years is at risk of losing its position after it was hit with a record fine.

The nation’s antitrust watchdog hit The North Face Korea last week with a 5.2 billion won ($4.6 million) fine for compelling all 151 of its retailers here to charge 10 to 15 percent higher prices than for rival brands since 1997 to maintain the brand’s premium image.

The Fair Trade Commission said that the unfair practices of the brand with over 30 percent market share also affected rival companies such as Kolon Sports, K2 and Columbia. Korean consumers also had to pay 50 percent more for the brand’s down jacket due to the price-fixing, according to Seoul Young Men’s Christian Association.   [The North Face]

You can read the rest of the article at the link which includes information about how The North Face jackets have become a major status symbol in Korean schools and even a source of bullying.

It seems to me if a company wants to set their own price for a product they should be allowed to do so.  If people do not want to pay it they can go elsewhere.  Obviously The North Face is offering a product that Korean consumers are willing to pay a premium price for.  It seems to me this has more to do with helping Korean outdoor businesses be more competitive against The North Face than actually caring what prices consumers are paying for these outdoor jackets.

So when is the FTC going to go after Samsung for example that sells electronics at prices higher in Korea compared to the United States?

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  • BBBBBBBBBBBBell
    4:15 pm on May 7th, 2012 1

    I would venture to say that a Gucci bag is of similar quality as an inexpensive bag purchased at Emart. Should the antitrust watchdog fine Gucci? We all know that would never happen. Many Koreans purchase things based solely on how expensive they are. This is one of the few places in the world where you can actually ask someone “How much did you pay for that?” and it’s almost a bad thing if it was discount. This is going to hurt Northface on two fronts. 1) The fine they will pay 2) When they drop their prices, no one in Korea will buy their product. I think I will start selling little rubber bracelets for exorbant prices and claim they will give you special powers. What? Someone is already doing that too?

  • tbonetylr
    4:58 pm on May 7th, 2012 2

    “Korean consumers also had to pay 50 percent more for the brand’s down jacket due to the price-fixing, according to Seoul Young Men’s Christian Association.”

    50% more than what?

  • tbonetylr
    5:13 pm on May 7th, 2012 3

    If the schools had heat – didn’t keep windows open during winter – lockers for students then coats wouldn’t have to be worn during classes and be such a status symbol. :roll: How about going to school, taking your coat off, and then putting it back at the end of the day, wouldn’t that be special?

  • Teadrinker
    5:30 pm on May 7th, 2012 4

    #2,

    50% more than the suggested retail price in North America (which doesn’t even reflect retail prices). For example, I ordered a brand name fleece mid-layer to wear under my winter soft shell from an American online retailer. It came to 145 000won including 50$ for shipping, which is half of the suggested retail price here.

  • kushibo
    5:41 pm on May 7th, 2012 5

    Price-fixing in different forms is illegal in various countries. Note the recent legal troubles that Apple and various other e-readers have gotten into, though that heavily relates to collusion.

    And while I see the argument in favor of allowing North Face to sell their goods at the prices they want to, couldn’t the same argument be made about E-Mart, LotteMart, Tesco, etc., doing the same?

    Supposedly this is to protect the consumer, but if the consumer wants to pay artificially more, well…

  • Matt
    5:46 pm on May 7th, 2012 6

    #4-this is why you have to go to China and get the “just as good” North Face knock offs for $30. :)

  • brent
    6:15 pm on May 7th, 2012 7

    Price fixing really only works when they are agreeing to pay the same price, not different prices. This is frivolous.

  • Tom
    7:04 pm on May 7th, 2012 8

    I was arguing with this one American dude online, who was arguing that North Face jackets were way more expensive in Korea than the US, because of South Korea’s unfair tariffs. He said that the US shouldn’t trade with South Korea, but should put economic sanctions to starve them out like North Korea. :roll:

    Look how useless and ignorant he was. Of course I told him that, but in his typical “US-can-do-no-wrong” and “I-know-everything-about-Koreans-because-I’m-so-special” mindset, he was absolutely sure Korea was up to no good. :roll:

  • BBBBBBBBBBBBell
    8:23 pm on May 7th, 2012 9

    #8 : It’s always good to see that you are arguing with someone online. Thanks for pointing out that they were American too. In other words…. http://i.imgur.com/BK0Is.gif

  • MT C
    9:10 pm on May 7th, 2012 10

    Check Levi’s sometime. The price is the same no matter where you buy their jeans. AND almost never on sale either.

    Just got here (Kuwait) from two years in the Philippines and the prices are the same or higher there for Levi products. Same is true here. Of course customs on U.S. goods is pretty high in the PI. Well all imported goods for that matter are taxed stiffly, unless of course, you are somehow exempted from the tax rolls. And that would be politicians or church leaders. No proof of course, just going from appearances.

  • MTB Rider
    9:59 pm on May 7th, 2012 11

    Meh. People pay WAY too much for a lot of things, just because of the marketing.

    http://www.cracked.com/article_17606_7-high-tech-products-their-cheap-ass-ingredients.html
    or
    http://www.cracked.com/article_19022_5-ways-hi-tech-retailers-are-secretly-screwing-you.html

    Do you own Monster HDMI Cables? Congratulations! You got HOSED! And if you bought Anjou cables? :twisted: :twisted: :twisted: :twisted: :twisted:

  • Lemmy
    11:32 pm on May 7th, 2012 12

    I don’t get it. The argument “Does anyone know if stopping retailers from offering discount prices is illegal anywhere else in the world? on an article with …$4.6 million fine for compelling all 151 of its retailers here to charge 10 to 15 percent higher prices.

    Korean’s love the best there is. Just this morning I saw a Rolls Royce in Seoul with the license place 17 7777.

    Things here are different than the US. What makes Korean’s elite are two things:
    1: I have something you can’t and 2: I paid more than you.

    I think there is more to this story, but I really don’t care so I won’t read any more about it.

  • Lemmy
    11:33 pm on May 7th, 2012 13

    By the way, my wife wasn’t impressed with the Rolls, she first noticed the license plate numbers and commented on that.

  • Teadrinker
    1:11 am on May 8th, 2012 14

    #6,

    Yeah, and brand new Sonyc CD player for 15$ (it’s like Sony guts).

  • Teadrinker
    1:16 am on May 8th, 2012 15

    #8,

    Yes, that guy was naive.

    Even if the tariffs imposed were the full 20% (the same you and I would pay), that would be on the wholesale price only, which means tariffs alone aren’t responsible for the markup.

  • Lazy_Contractor
    8:20 pm on May 9th, 2012 16

    Wait a second…..

    So, if I owned a company and sold a product AND set the price I want to sell that product at – the Korean government can come tell me I charge too much and fine me?!?!?!

    Does anyone else see something wrong with this?

 

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