Orion hikes snack prices for 1st time in 9 years

A shop employee displays Orion's Poca Chip products on a shelf at a large grocery store in Seoul, June 24. Newsis

By Kim Jae-heun

Orion will increase prices of 16 products by an average of 15.8 percent on Sept. 15, its first price increase since 2013, the snack maker said Tuesday.

By item, its most popular Choco Pie will see its price rise by 12.4 percent, followed by Poca Chip by 12.3 percent and Turtle Chip by 11.7 percent.

Until early this year, Orion's original plan was to increase its share in the market by taking advantage of its products' price competitiveness instead of increasing their price.

“We have been effectively freezing the prices of all our products by actively reducing manufacturing costs and pushing forward cost-effective management. However, due to the soaring prices of raw materials and energy sources since last year, the company has been under pressure to raise prices,” an Orion official said.

According to the confectionery company, the prices of cooking oil, sugar and potatoes rose more than 70 percent year-on-year as of the end of August. The energy cost for manufacturing products also skyrocketed more than 90 percent in the same period.

“We have defended well against our profit decline thanks to our increasing sales overseas until the first half of this year. However, our profitability has been falling significantly from July and so we decided on the price hike,” the official said. “We will only raise prices for products with profit margins that have plummeted due to the rising costs of raw materials and energy resources.”

The official added that Orion can lower its prices or increase the amount of products if the prices of raw materials and energy costs stabilize in the near future.