1118-Lego caught up in blame game

Lego’s headquarters in Denmark and its Korean subsidiary are passing the responsibility to each other over complaints here that the prices of its toys sold to Korean consumers are too high.

Lego has been drawing criticism for setting “higher-than-normal” prices for its product in Korea. For instance, the Lion CHI Temple, a popular toy, is priced at 198,000 won ($186.32) in Korea, 63 percent higher than in France.

The question is who sets the prices of toys sold in global markets and by what standards.

Lego Korea says it only follows a pricing policy set by its parent firm. However, the Lego Group claims pricing is up to its local units.

“The Lego Group does not set the price of Lego products anywhere in the world and that is our global policy,” the group’s Press Chief Roar Rude Trangbaek told The Korea Times in an e-mail. “There are suggested retail prices in all markets, which can vary from market to market depending on a range of factors.”

“The suggested retail price is as it states, a suggestion, and the price Lego products sell for in our own channels,” the official added.

Lego Korea however said pricing is not its responsibility. A Lego Korea official said the Korean unit cannot decide on the prices but only provide the necessary information about pricing to headquarters.

“The head office decides the prices of toys sold in global markets based on the business situation in each country and the size of local toy market,” the official said.

Critics say they can’t understand why Lego toys should be sold so expensively because it doesn’t operate any shops for direct sale to Korean consumers. Korean consumers can buy Lego toys only through its online store and partner shops.

It also doesn’t run a direct after-service center, which means those who bought Lego toys overseas can’t receive repair and exchange services in Korea.

“I believe Lego is passing the burden of high marketing costs to consumers. That’s why their products are expensive here,” a source in the toy industry said.

“Lego allegedly accounts for half of the plastic toy market in Korea. Korean toy firms find it hard to survive in this situation.”

The toy firm has 29 offices internationally including China, Japan, Singapore, Hong Kong, Taiwan and Korea in Asia, however, Korea is the only country where the Lego runs a direct online mall among Asian countries.