Prices for everyday foods and drinks in South Korea, including that of milk and ramyeon, are reportedly set to rise due to the disruptions caused to the supply chain by the pandemic, which has subsequently inflated the prices of agricultural goods.
As per the data released by the Bank of Korea, for the third quarter, consumer prices have risen nearly 2.6% compared to the same period from last year. It is reported to be the steepest on-year increase in the past nine years by the agency.
Kyochon F&B, one of the largest fried-chicken franchise in South Korea, was the first to feel this impact and increased its prices in response. The company had to raise the prices of its menu by an average of 8.1%, the first time in seven years. Its flagship chicken item, Honey Combo Chicken, had its cost go up by ₩2,000 ($1.68), now selling at ₩20,000 ($16.85).
An official from the company stated that to effectively tackle the inflated cost burden of its franchise stores and improve its profits, the company could not hold off on raising the prices of its menu items.
Following a 50% hike in the prices of canola oil and fish, Dongwon F&B, the food division of Dongwon Industries, also raised the prices of its canned tuna by an average of 6.4%.
A spokesperson from the company stated that the hike in prices was inevitable, citing the rise in global oil prices as well as the ongoing logistics crisis, which is causing the prices of oil and fish used in its products to go up as well.
Sung Tae-yoon, a professor of economics at the Yonsei University, explained that the output of food commodities dropped because the pandemic disrupted the supply chain and elevated labor costs. Consequently, consumer demand could not be matched as the restrictions eased down and the market was flooded with liquidity.
Industry experts believe that the inflation will continue till year-end, raising concerns for the nation’s lower earners who usually spend much of their income on food.
Kim Sei-wan, a professor at Ewha Womans University, stated that especially due to the unstable labor market, the lower class will be the most affected by the increased food prices as many have lost their jobs during the pandemic.
Source credit: http://www.koreaherald.com/view.php?ud=20211122000812