Korea Vows to Rein in Prices as Ramen, Snack and Drink Costs Surge

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Prices for food staples such as ramen, snacks and drinks are rising one after another in South Korea. Vegetable prices have also climbed sharply in the wake of a heat wave. At supermarket food aisles, items that have not gone up are hard to find. The government says it will make an all-out effort to stabilize prices ahead of the Chuseok holiday. But some grumble about how it can rein in prices that have already risen as far as they have.

Paldo: “Responding to Rising Costs, Price Adjustments Unavoidable”

Paldo will raise the shipment prices of some ramen and beverage products starting on the 1st of next month, according to the industry on the 21st. The increases cover 12 cup noodle products, including five Wang Ttukkeong varieties, two Dosirak varieties and Paldo Bibimmyeon Cup, along with nine beverages such as canned Birak Sikhye (238 ml). The average increases based on shipment prices are 5.5% and 5.8%, respectively. A Paldo official said, “We have continued to improve productivity and management efficiency in response to rising costs, but for some products a price adjustment is unavoidable,” adding, “We minimized the scope and level of the increases in consideration of the burden on consumers.”

Earlier, Nongshim raised the shipment prices of major cup noodles and snacks such as Saewookkang by an average of 6% and 5.5%, respectively, starting on the 1st of this month. CJ CheilJedang raised the prices of 27 products, including Hetbahn instant rice and dumplings, by an average of 8% last month. Ottogi adjusted the shipment prices of 29 products, including curries and glass noodles, starting July 16. Lotte Chilsung Beverage also raised the shipment prices of 44 products, including Chilsung Cider, by an average of 5.3% starting on the 26th of the same month.

Bread Prices Rise in Domino Effect on Higher Flour Costs

Bread prices are going up as well. Paris Baguette will raise the prices of 86 bread products, including Sangmijong Fresh Bread, and 41 cake and dessert items in stages starting on the 25th. The average increase is 5.0%. Samlip will raise the convenience-store prices of about 50 major bread products by an average of about 9% starting on the 1st of next month. Tous les Jours and Dunkin, both operated by CJ Foodville, already raised the prices of some products late last month and early this month.

Amid the heat wave, the rise in agricultural prices is also alarming. According to the Korea Agro-Fisheries and Food Trade Corporation’s (aT) price information system KAMIS, the average retail price of 100 grams of spinach was 2,121 won as of the 20th, up 94.94% from 1,088 won a month earlier. Over the same period, the price of 10 cucumbers rose 38.76% from 7,977 won to 11,069 won, and 50 grams of perilla leaves jumped 53.6% from 987 won to 1,516 won. One zucchini rose 38.51% and one head of napa cabbage rose 61.27%.

Government Pledges to Curb Prices Before Chuseok, but Market Is Skeptical

With the situation as it is, attention is focused on the price-stabilization measures the government will unveil next month. Lee Hyung-il, first vice minister of economy and finance, chaired a vice-ministerial meeting on prices at the Government Complex Seoul on the 4th and reviewed response measures. Lee urged that “with upside risks to prices such as food costs still present, all ministries make an all-out effort to minimize future upward price pressure and ease the burden on people’s livelihoods.” The government will unveil a Chuseok livelihood-stability package in September, containing measures to stabilize the prices of Chuseok holiday goods and ease the burden on vulnerable groups.

But many are skeptical about whether the price-stabilization measures will work. One industry official said, “If the government leads and supports large-scale discount events, consumers’ perceived prices may fall temporarily,” but added, “Unless fundamental factors such as surging raw-material costs are resolved, prices will rise again.” One consumer said, “Even as the government steps up its price monitoring, companies have raised prices,” adding, “They say they raised them 5 to 10%, but when I feel it, it seems like they doubled. There has never been a time when grocery shopping was as scary as it is now.”