Amid Food Price Reduction Trend, Chicken Industry Deliberates Price Hikes
As the government encourages major food companies to lower prices for price stability, some companies have reduced product prices. In February, the government formed a 'Special Management Task Force for Consumer Prices and Distribution Structure Inspection Team' with seven related ministries and is focusing on 13 key food items. The Fair Trade Commission detected price collusion among sugar manufacturers and imposed a fine of 408.3 billion won, and investigations into collusion in flour and starch sugar are also underway. Following government investigations, the sugar and flour industries lowered prices for raw materials like sugar, flour, and starch sugar, prompting major food companies to join in price reductions.
Lotte Wellfood, Binggrae, Orion, and Samlip have reduced prices on a total of 19 products by up to 13.4%. Ramen manufacturers like Nongshim, Ottugi, Samyang Foods, and Paldo, as well as CJ CheilJedang and Daesang, have also lowered prices on some products, including canola oil and sunflower seed oil. Lotte Wellfood and Samlip lowered prices on their mass-produced bread products by an average of 5.4% to 6.0%, and SPC Group's Paris Baguette and CJ Foodville's Tous Les Jours also cut prices on cakes and bread last month.
In contrast, the chicken industry finds itself in a difficult situation, unable to lower prices due to the burden of raw material and labor costs, drawing significant consumer attention. Despite successive price cuts across the food industry, chicken chains are deliberating on their pricing strategy, unable to decide on reductions due to rising costs such as labor, rent, and delivery fees. While cooking oil and flour prices have fallen, the price of chicken, a key raw material, is on the rise. According to the Korea Poultry Association, the price of broiler chickens (sizes 9-10) stood at 5,154 won per kilogram as of April 16. Consequently, KFC raised prices on 23 items, including chicken menus, by 200-300 won, and Mom's Touch increased prices on 43 items by up to 1,000 won starting in April. Kyochon Chicken, BBQ, BHC, and Puradak are operating under a voluntary pricing system where franchisees adjust prices based on store conditions. Prices for major chicken franchise signature menus in the Seoul area generally range from 20,000 to 30,000 won.