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Staff Reporter
You go to a nearby Starbucks for a large caffe latte before heading to a country club for an 18-hole round of golf. At a mid-way house after finishing the front nine, you stop for a drink of your choice from a refrigerator-full of Millers, Buds and Heinekens, before going on to finish the remaining nine holes.
Relaxing as it may be while soaking in a hot tub after a fulfilling round of golf, you may feel the hairs on the nape of your neck stand up at the realization of how much bigger a hole this day of pleasure is burning in your pocket, especially compared with the same day spent in the United States, Japan, or any other of the G-7 nations.
Here is a checklist for price comparison, compiled by the Korea Consumer Board, a consumer protection agency under the Fair Trade Commission.
A cup of Starbucks coffee is on average 60 percent higher in Korea than in the United States, Japan, Britain, Germany and Japan, the board says.
For imported beers such as Miller, Budweiser and Heineken, the average price is about 1.8 times higher. For orange juice, one has to pay about 50 percent more in Korea.
A round of golf costs 2.3 times more in Korea.
``We expect these foreign franchises to take into consideration these price differences and bring the prices to an appropriate level,'' said Lee Jeong-ku, deputy director of the board, adding that the imported goods selected for comparison were done so because they were commonly available in all the surveyed countries.
However, the comparisons were not made with direct exchange rates but according to the purchasing power parity or PPP index. PPP is calculated in cross-comparisons of prices of over 50 daily necessities, with consideration given to such pivotal factors as individual income. The PPP-calculated exchange rate goes for 749 won against the dollar.
``PPP is widely used around the world as a truer reflection of international price comparison,'' Lee said.
Accordingly, the survey also showed consumers in Korea pay about 55 percent more for cosmetics than consumers of the compared countries; 46 percent more for snacks (in this case, Pringles was sampled); and about 37 percent more for original books (in this case, JK Rowling's Harry Potter books).
If the Korean price is taken as 100, Britons would pay 68 percent of what Koreans pay for Starbucks coffee, while Japanese would pay 57 percent.
In comparison with other Asian developing competitors such as China, Singapore and Taiwan on the basis of the current exchange rate, Korea is pricier on average for five out of seven items. ``Green fees'' for a round of golf are about 43 percent higher than in other Asian countries.
Also under the same standard, prices in Korea are higher than those in the United States for six out of seven products sampled.
Starbucks Korea said that the board's comparison was unfair. ``Prices of Starbucks coffee vary from one country to another,'' Park Chan-hee, spokeswoman for the multinational franchise said. ``The factors included in the varying prices are expenses for personnel and franchise fees, among other things.''
foolsdie@koreatimes.co.kr
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