It was found that a power tool manufacturer in Tokyo had forced subcontractors to continue deliveries at a state below the cost, and the Japan Fair Trade Commission issued a recommendation to prevent recurrence, claiming that it constituted "buying and taking" prohibited by the Subcontract Act.
The recommendation was received by Koki Holdings, a power tool manufacturer in Minato-ku, Tokyo.
According to the Japan Fair Trade Commission, this company outsourced the manufacture of covers to be attached to dust collectors that collect wood chips to a subcontractor, but the unit price remained unchanged for more than 10 years.
Since the subcontractor had been below the cost from the middle, when he submitted a quotation requesting an increase in the unit price around January, the company told him that he would gradually increase the unit price in the future, so he approved the transaction at a new unit price, which was about 1% lower than the quotation.
However, there was no specific plan to increase the unit price in the first place.
In addition, although the newly set unit price was 46% higher than before, it was still below the cost, and when the contractor changed to another operator, it more than tripled.
The Japan Fair Trade Commission (JFTC) has issued a recommendation to prevent recurrence, stating that this case, in which the goods were delivered at a significantly lower price, constitutes a "buying and swatting" prohibited by the Subcontract Act.
Koki Holdings commented, "We deeply apologize for the concern and inconvenience caused to all those involved, and we will take the recommendations seriously and strive to strengthen compliance and prevent recurrence."