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| A woman inspects food item at a large discount store in Seoul, on Sept. 29, 2022. Korea times file |
By Kim Jae-heun
A 35-year-old office worker named Kil is definitely not happy with food and beverage companies raising prices on all of their products from the beginning of this year. "The price of water went up, the price of soda went up, the price of fried chicken went up and processed food prices went up. How are people going to live with all the food prices going up? They already increased their product prices last year so why are they raising them again?" Kil said.
A 59-year-old housewife named Kong also expressed her concerns about continuing increases in living costs.
"I saw the news on television that soaring raw material costs around the world have somewhat settled down. But why are local firms still increasing the price of their products? I don't understand. It just seems like they want to make a profit from naive consumers," Kong said.
As Kil and Kong stated, most food firms have already raised prices two to three times last year as the price of raw materials ― mainly grains and crude oil, went through the roof due to the war in Ukraine.
Most domestic food firms have a 60 percent reliance on raw materials supplied from overseas. They say that last year's price hikes did not ease their expense burdens.
As of Jan. 1, Haitai Confectionery & Foods increased its 415-gram dumpling pack price from 4,800 won ($3.87) to 5,300 won, up by 10 percent. CJ CheilJedang raised its two stew sauces' prices by 21 percent from 2,400 won to 2,900 won. SPC also raised prices for two chicken items by 13 percent from 7,900 won to 8,900 won. Coca-Cola increased its 350-milliliter can of soda by 5.2 percent from 1,900 won to 2,000 won.
"The aftereffects of last year's raw material price hike are now hitting us. There is a 'time difference' in reflecting the price fluctuations. Retail processes are complicated. Food items are released to the market after they are processed and reprocessed and delivered to the retail stores. There are labor costs and logistics expenses to consider," a local food firm official said.
Many food firms here saw increased sales last year, but also decreases in profit. Five major companies such as CJ CheilJedang, Daesang, Pulmuone, Dongwon F&B and Nongshim saw their operating profit decline 5 percent to mark a total of 596.7 billion won in the third quarter of last year.
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