Costco Wholesale’s Japan unit has received a warning from the country’s Fair Trade Commission over reduced payments to subcontractors, saying that the retailer cut fees without giving a valid reason.
The bakery and food suppliers saw their compensation reduced by ¥33.5 million ($227,000) from 2021 to 2023, the agency said Tuesday. The retailer also returned products worth about ¥2 million without properly conducting quality checks, according to the FTC.
Costco, based in Issaquah, Washington, opened its first outlet in Japan in 1999, and now operates 33 membership warehouses employing about 14,000 across the country.
"We have cooperated fully with the investigation,” Costco Wholesale Japan said in a statement. "We take these recommendations by Fair Trade Commission seriously and will strive to improve our operations completely in line with the law.”