Recently, there has been shocking news that the production process of Binggrae’s popular product ‘Burabocon’ has stopped trading with small and medium-sized enterprises (SMEs) and has instead entered into contracts with a company owned by the chairperson's children. The Fair Trade Commission (FTC) has started an investigation into these allegations, emphasizing the importance of protecting SMEs and ensuring fair trade. In this blog post, we will delve deep into the background and implications of this incident, as well as the potential impact of the FTC's investigation results.
Changes to ‘Burabocon’
‘Burabocon’ is a beloved ice cream snack for many. However, recent news has surfaced that it has stopped trading with SMEs and instead entered into contracts with a logistics company owned by the chairperson's children. The FTC has begun investigating these allegations, raising important questions about corporate ethics and fair trading practices.
The FTC Investigation and the Crisis for SMEs
1. FTC's Investigation Initiation
The Fair Trade Commission has initiated an investigation into allegations that Kim Ho-yeon, the chairperson of Binggrae, funneled work to the logistics subsidiary ‘Jedae’ owned by his children. The investigation focuses on whether there was illegal intervention in the process where Haetae Ice Cream, a subsidiary of Binggrae, stopped trading with the supplier Dongsan Industry, which had been responsible for producing ‘Burabocon’, and instead entered into a contract with Jedae. This raises critical questions about whether unfair internal transactions occurred during the supply changes.
2. Survival Crisis for SMEs
The termination of trade with Dongsan Industry and other SMEs will significantly impact these smaller businesses. SMEs do not have the same financial resources and assets as large corporations, so such decisions directly threaten their survival. Considering how crucial the production of ‘Burabocon’, a popular product, is to SMEs, this incident should not be viewed merely as a trading alteration but as a serious issue linked to the survival of these smaller enterprises.
3. The Dominant Position of the Chairperson's Children
Jedae is a company wholly owned by the children of Kim Ho-yeon. This family-centric ownership structure increases the opacity of decision-making within the company and can hinder fair competition. Especially given the continuing growth of trade between Binggrae and Jedae, the severing of ties with SMEs is an even more concerning aspect.
The Importance of Corporate Ethics and Fair Trading
This incident is not just about the trading issues between Binggrae and SMEs; it highlights the importance of corporate ethics and fair trading practices. We hope that the Fair Trade Commission will conduct thorough investigations to uncover any illegal activities and create an environment where SMEs can compete fairly. Continuous attention and efforts are necessary to ensure that corporations fulfill their social responsibilities and maintain healthy trading relationships with SMEs.
3-Line Summary for You
- Binggrae has stopped trading with its production partner for ‘Burabocon’ and has chosen to work with the chairperson's children's company, leading the FTC to investigate.
- This decision poses a threat to the survival of SMEs and raises questions about corporate ethics.
- It emphasizes the need for ongoing efforts to create a fair trading environment.
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