Egg Price Fixing Allegations and Farmers' High Profits Spark Controversy

The Fair Trade Commission is investigating allegations of undue interference by a specific organization in the egg pricing process.

Public controversy is growing as government analysis reveals that layer farmers are earning high profits. According to data from the Ministry of Agriculture, Food and Rural Affairs, the average annual net profit for a layer farm in 2024 is approximately 380 million won, which is three times that of a hog farm and ten times that of a broiler farm.

An analysis suggests that the reason egg prices, which hover around 7,000 won per carton, are not easily decreasing lies in the Korea Layer Farmers Association's pricing methods and a complex distribution process. This is coupled with recent instances where farm-gate prices actually rose even during periods of increased production and falling feed costs, highlighting the discrepancy between consumer-perceived prices and actual supply-demand conditions. Some analyses indicate that the association's announced prices serve as a benchmark irrespective of production costs or supply and demand, influencing transaction price formation. Concerns have been raised that since the spread of highly pathogenic avian influenza, the association's announced prices have effectively acted as the market price baseline.

The Korea Layer Farmers Association has countered that prices have risen despite their halting price announcements since May last year, and stated that judging profitability based on specific periods is inappropriate.

The Fair Trade Commission is conducting its investigation focusing on the linkage between price announcements and actual farm-gate prices, and has indicated that if collusion is confirmed, it will even consider revoking the organization's establishment permit.