Coffee franchise Caffe Bene fined for abusing market power

South Korea's antitrust watchdog said Monday that it has fined Caffe Bene, the country's largest coffee franchise, 1.94 billion won (US$1.88 million) for abusing its market power in deals with shop owners.

The Fair Trade Commission accused Caffe Bene of forcing shop owners selling coffee under its brand to bear full costs related to a promotional event jointly arranged with KT Corp. in 2010 to provide discounts to customers of the mobile carrier. 

Caffe Bene was supposed to shoulder half of the costs, but it reneged on its deal with shop owners and transferred all of the costs to them, the FTC said.

The FTC also accused the coffee chain of forcing shop owners to use its interior materials and devices when opening a shop. It earned 181.3 billion won in sales from such practice, which lasted from November 2008 to April 2012, according to the FTC. That accounted for 55.7 percent of the company's total sales during the period.

Launched in November 2008, Caffe Bene has emerged as the country's largest coffee franchise with 850 shops being operated under its brand as of end-2013. It also runs seven shops in the U.S., including in New York and Los Angeles.

Caffe Bene posted 176.2 billion won in sales in 2013, according to the FTC.

(Yonhap)