Starbucks, Twosome, Ediya pressed to lower prices amid falling coffee bean prices

A customer pays for his beverage order at a Starbucks Korea store in Seoul, Feb. 22. Korea Times file

By Kim Jae-heun

Starbucks, Twosome Place and other coffee chains are facing growing pressure from consumers to cut their beverage prices as the falling costs of imported coffee beans make it less expensive to produce a cup of joe, according to industry officials, Friday.

According to the Intercontinental Exchange Futures in New York, the future price of Arabica bean fell from $2.40 (3,144 won) at the end of 2021 to $1.60 as of July 31. Arabica beans account for 60 percent to 70 percent of global coffee consumption.

Pointing this out, consumers called for lowering the prices of coffee drinks at major franchise stores such as Starbucks Korea, A Twosome Place and Ediya Coffee, which all raised their prices last year by between 100 won (8 cents) and 700 won.

“I read on the news that the price of coffee beans has fallen recently. Why aren't coffee franchise brands not lowering their beverage prices? They were fast in raising prices when international coffee bean prices rose,” said a 32-year-old office worker surnamed Han who lives in Seoul. “Convenience stores are cutting the price of their caffeinated beverages. Franchise firms should do same.”

However, the companies said it is unlikely that they will bring back the old prices because other expenses such as electricity, gas, labor and logistics costs are still high.

“We raised our beverage prices for the first time in seven and a half years. In the past three years, coffee prices soared around the world, but we froze the price of our drinks. I don't think we are going to lower the prices anytime soon,” a Starbucks Korea official said.

Ediya Coffee echoed a similar view.

“The price of coffee beans accounts for only 10 percent of the overall beverage price. Although the international price of coffee beans has fallen recently, it is not down to the level of two years ago, when it doubled,” an Ediya Coffee official said. “That being said, it was other costs that have risen so much such as the price of raw materials like plastic in manufacturing cups, lids and straws as well as the price of milk, which were largely reflected in our new price.”

Korea Dairy Committee has decided on the price of raw milk at 88 won per liter, starting in October. This will also make it hard for local franchise firms to lower the price of drinks that use milk as an ingredient.