The nation’s antitrust watchdog has launched a large-scale investigation into whether local food companies were involved in shady deals before recent price hikes of their key products.

The Fair Trade Commission picked some processed food items such as instant noodles, canned tuna, beverages and pre-cooked rice, whose prices rose almost simultaneously in recent weeks.

“The market dominance of top players is very powerful within the food industry. Considering their price hikes were carried out within a short period, there could have been unfair deals among them,” said a FTC official in a interview.

The official hinted at a thorough investigation, saying that “they may not discuss product prices directly. If they exchanged related information such as import prices of grains, that could be considered price-fixing.”

The FTC, however, decided not to include agricultural and marine products in the investigation as price-rigging is unlikely in markets dominated by large numbers of small competitors.

The antitrust probe comes after President Lee Myung-bak urged price control measures ahead of the Korean Thanksgiving Day during a Cabinet meeting on Monday.

Depending on the result, industry watchers say, the FTC will expand the investigation into the whole food industry. Last year, the agency reprimanded huge producers of milk, cheese and instant noodles over charges of fixing prices.

By Lee Ji-yoon (jylee@heraldcorp.com)