[CARD NEWS: Opinion] Raising the fried chicken price? No way.

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[CARD NEWS: Opinion] Raising the fried chicken price? No way.

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On the day that former President Park Geun-hye was impeached, the demand for fried chicken spiked. On the same day, there was a quiet attempt to raise the price of fried chicken.

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1) On March 10, while everyone’s eyes were caught on former President Park Geun-hye’s impeachment, another crucial decision was made.

2) BBQ, the biggest fried chicken franchise in Korea, announced their plan to raise chicken prices.

3) BBQ explained that the time of their announcement had nothing to do with Park’s impeachment. Yet, their explanation was not enough to avoid criticism that they tried to keep their decision quiet amid the confusion.

4) Amid the national confusion over the recent corruption scandal, the grocery industry has been raising the prices of beer, ramen and hamburgers since the end of last year. Unfavorable public opinion over the increase in the price index grew when BBQ announced that they were raising prices.

5) The government took tough measures to deter the company’s decision.
The government threatened to ask the National Tax Service to conduct an investigation into BBQ if the company goes ahead with the plan. As a result, BBQ gave in to the government.

6) “It was too much for the government to interfere in the market, as the [fried chicken] industry is not a monopolistic market, but a free competitive market.”
- Lee Kyeong-mook, a professor at Seoul National University Business School.

There are also criticisms of the government’s intervention on the market.

7) ‘BBQ to raise its chicken prices… Golden Olive Chicken, from 16,000 won to 18,000 won [$14.30-16.00]’
‘The price hike will be pushed ahead… the chairman of BBQ is seeking the proper time to announce’
‘BBQ explained; “We’ve never decided nor announced a plan to raise the price”’

The remarks from BBQ have been reversed a number of times, and the reasons they’ve given over the price raise have not been convincing. BBQ’s attitude has caused a lot of confusion.

8) The average price of fried chicken: 16,000 — 18,000 won
The average price of a live chicken: 2,560 won
The average price of a prepared and defeathered chicken: 3,490 won
source: Ministry of Agriculture, Food and Rural Affairs

BBQ made an excuse that their price raise was inevitable as the chicken price surged due to the outbreak of avian influenza. However, the price of chicken accounts for only 20 percent of the fried chicken’s production costs.

9) “The cost of delivery was newly added to the overall cost.” - BBQ
Regarding the doubts, BBQ suggested other factors for the price hike such as the commission fee for smartphone food delivery applications and wages, other than the primary cost of chickens.

10) This time, BBQ faced another backlash from Baemin, the number one smartphone food delivery application service. The delivery service company criticized BBQ for shifting the blame for its price hike to them.

11) As a result, BBQ’s attempt to raise prices only left suspicions that they secretly tried to make more money amid the social confusion when the prices of chicken were unstable due to the outbreak of avian influenza and people’s attentions were focused on the national scandal.

12) “The construction [of the fried chicken industry] must be reformed as the farms and the retailers are marginalized while only the companies in the middle take the profit.”
- Jang Eun-jeong, the author of ‘The history of fried chicken in South Korea’

On the other side, some pointed out that the construction of the fried chicken industry should be reformed. What they claim is that it is not a matter of the price, but the industry’s construction that is advantageous only to the franchise companies.

13) The government and the companies got into conflict with each other over the price of fried chicken. Instead, why don’t they cooperate to reform the unbalanced chicken market?



Directed by Lee Jeong-bong
Constructed by Kim Min-pyo
Designed by Bae Seok-yeong
Translated by Son Min-young
Edited by Jim Bulley
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