Korean Ramen Noodle Makers Hit with Price-Fixing Class Action Lawsuit

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According to a class action lawsuit filed in California on September 5, four South Korean companies have conspired to raise the prices on their ramen noodle products, forcing U.S. customers to pay artificially higher prices for the products.

Massachusetts resident Stephen Fenerjian filed the antitrust class action lawsuit, alleging that the four companies and their U.S. subsidiaries have agreed to raise prices at least six times since 2001, with an average price increase of nearly 54 percent. He claims that the ramen noodle makers shared pricing information and conspired to raise the prices on their products simultaneously.

According to the ramen noodle class action lawsuit, the defendants’ “unlawful conspiracy to raise, fix, maintain and/or stabilize prices of Korean Ramen Noodle Products resulted in artificially inflated prices of Korean Ramen Noodle Products in the United States. Plaintiff paid a premium for Korean Ramen Noodle Products during the Class Period over the price that would have prevailed in a competitive market.”

The companies named in the ramen noodle price-fixing class action lawsuit include Ottogi Co. Ltd. and its subsidiary Ottogi America Inc.; Nong Shim Co. Ltd. and its subsidiary Nongshim America Inc.; Korea Yakult Co. Ltd. and its subsidiary Paldo America; and Samyang Foods Co. Ltd. and its subsidiary Samyang USA.

According to the class action lawsuit, “Nong Shim, as the market leader, would increase prices first, and the other Defendants would raise the prices shortly thereafter. The defendants would provide each other non-public pricing information, often through each company’s market research teams, to promote this collusion.”

This class action lawsuit is the third to be filed against the ramen companies in recent months. The plaintiffs in these putative class action lawsuits allege that the price-fixing conspiracy was revealed in 2012 by the Korean Fair Trade Commission (KFTC), the nation’s antitrust regulator. The KFTC fined the companies $125 million and enjoined them from sharing pricing information with each other.

The South Korean ramen noodle companies blamed the price hike on the increased cost of ingredients. According to the class action lawsuit, they issued false and misleading statements about the rising cost of wheat flour and palm oil to conceal their conspiracy. However, Fenerjian’s class action lawsuit contains information from a KFTC order detailing the conspiracy, including communications between the company executives in which they discuss the price increases.

Fenerjian seeks to certify a Nationwide Class of consumers who purchased Korean ramen noodle products in the United States from May 2001 until the present. He seeks monetary damages and an injunction that would prevent the South Korean companies from violating U.S. antitrust laws.

Fenerjian is represented by Alan R. Plutzik and Michael S. Strimling of Bramson, Plutzik, Mahler & Birkhaeuser LLP and Mark P. Kindall, Robert A. Izard, Jeffrey S. Nobel and Nichole A. Veno of Izard Nobel LLP.

The Ramen Noodle Price-Fixing Class Action Lawsuit is Stephen Fenerjian v. Nong Shim Company Ltd., et al., Case No. 3:13-cv-04115, in the U.S. District Court for the Northern District of California.

UPDATE: On Nov. 19, 2018, plaintiffs in a class action lawsuit over an alleged ramen noodle price-fixing scheme presented evidence that two South Korean companies altered price lists before turning them over to authorities.

UPDATE 2: On Dec. 17, 2018, a federal jury recently determined that Korean ramen noodle companies were not liable for alleged price-fixing which purchasers claim raised prices.

UPDATE 3: August 2019, a $350,000 settlement fund will be distributed between direct purchasers of Korean noodles that were allegedly the subject of a price-fixing scheme.