S. Korea`s top holding firms heavily rely on trademark profit

2017.11.13 16:25:52 | 2017.11.13 16:26:16

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Trademark and branding rights pose as major revenue base for Korean holding entities of household corporate names.

The website Chaebul.com that tracks market information of the country’s largest business groups Monday said its survey of 13 holding firms with an asset of more than 500 billion won ($446 million) showed their profit from trademark fees totaled 707.4 billion won a year, almost 15 percent of their combined revenue based on the latest available data.

Of them, six holding companies including Dong-A Socio Holdings, Jeil Holdings, Kolon, Hansol Holdings and Hankook Tire Worldwide showed their trademark dependence reaching more than half of their revenue.

The survey result came amid ongoing efforts for the country’s anti-trust watchdog to make it mandatory to disclose how they charge their subsidiaries for the use of trademark and branding to crack down on easy profiteering.

Dong-A Socio Holdings had the highest dependence with income from services and trademark fees paid for by subsidiaries such as Dong-A Pharm and Dong-A ST reaching 32.6 billion won or 58.9 percent of revenue. Jeil Holdings of Harim Group generated 2.2 billion won, or 58.7 percent of sales from trademark fees. Kolon and Hansol were also top six in trademark income percentage with 58.2 percent and 53.8 percent, respectively.

In terms of value, LG Corporation, the holding company of LG Group, came first by raking in 247.8 billion won, 40.4 percent of its revenue of 614 billion won, from trademark fees paid by affiliated companies. It was followed by SK Corporation, the holding company of SK Group with 203.7 billion won or 6.5 percent of revenue, and GS Holdings of GS Group with 68.1 billion won or 18.2 percent of revenue.

Half of revenue in the 13 surveyed holding firms mainly came from trademark fees, dividends and property leasing, according to the survey.

By Kang Doo-soon and Minu Kim

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