Korea Customs Service confirmed Wednesday it had ordered Diageo Korea last year to pay 216.7 billion won ($189.8 million) for having underreported prices when importing liquor over three years.
The KCS confirmed the imposition, which would be the largest of its kind in amount levied on a business.
The customs office said Diageo Korea’s transfer prices had stayed significantly lower than those of other liquor importers.
“The import prices Diageo Korea reported were considerably lower than those reported by their competitors around the same time,” a KCS official was quoted as saying.
Diageo Korea denied any wrongdoing, saying it used the same price as the import price it reported in 2004. The company requested a suspension of the imposition and a court accepted the proposal in October last year.
The customs agency is currently waiting for the final verdict from the Supreme Court.
The imposition is the second for Diageo Korea. The customs office had imposed a total of 194 billion won in December 2009 for artificially lowering import prices of Windsor for 39 months between 2004 and 2007.
Diageo Korea, which sells brands including Johnnie Walker and Windsor, posted 104.1 billion won in net profit with sales hitting 397.3 billion won last year.
By Cynthia J. Kim (
cynthiak@heraldcorp.com)
