Franchises refuse to cut fried chicken prices
People eat fried chicken at a restaurant in Seoul in this file photo. Fried chicken franchises have remained reluctant to drop their prices, despite the fall of wholesale price of chickens amid the nationwide avian influenza outbreak. / Korea Times file
By Park Jae-hyuk
Fried chicken franchises have been criticized for not cutting prices despite the wholesale cost of chickens falling almost 30 percent a month after the nationwide avian influenza outbreak.
According to the Korea Broiler Council, the wholesale price of a kilogram of chicken was 1,390 won, on average, as of Friday, a 26.5 percent drop from a month earlier. Industry observers consider 1,700 to 1,800 won a reasonable wholesale price for chicken.
Large discount chains also cut chicken prices from 5,980 won to 4,980 won, a 16.7 percent decline, during the period.
Industry officials said the price fall resulted from less demand for chicken because consumers are anxious about eating it. They said egg and chicken prices are going in opposite directions because most of the slaughtered chickens were layers.
According to E-mart, the nation’s biggest discount chain, chicken sales dropped 46.7 percent year-on-year this week.
However, Korea’s fried chicken franchises have maintained prices at 10,000 to 20,000 won for one.
Consumers have complained that it is hard to understand the franchises’ price policies.
“When the wholesale prices rise, they quickly raise the prices,” a university student surnamed Choi, 24, said. “However, they’ve never cut the prices when the wholesale prices drop.”
An office worker surnamed Chung said fried chicken prices are similar to gasoline prices, saying he has hardly seen the two decline.
Fried chicken franchises say it is impossible to reflect the wholesale price drop in the retail price every time. They also say most firms receive chickens from suppliers through contracts.
“The wholesale price of chickens only accounts for about 1 or 2 percent of the price of fried chicken,” a spokesperson for Genesis BBQ said. “Other factors exist for fried chicken prices, such as distribution and marketing costs.”
The official of the nation’s largest chicken franchise said consumers should complain to chicken suppliers, such as Harim or Maniker. He said BBQ has not increased prices over the past few years.
Harim, however, claimed BBQ is trying to avoid its responsibilities, as the franchise decides its product prices.
“We are a mere supplier of chickens,” a Harim spokesperson said. “Chicken prices may rise next year, as the supply of chickens continues to decline.”