Milk price hike squashed by government

Industry

Published: 11 Oct. 2011, 21:16

Milk price hike squashed by government

Cartons of Seoul Milk displayed at a local discount store. Seoul Milk, the nation’s largest dairy manufacturer, originally planned to raise its milk price by 10 percent due to the rising cost of raw milk, but it retracted its decision yesterday afternoon after facing mounting pressure from the government, which has pledged to tackle inflation. [YONHAP]

Seoul Milk, the country’s biggest milk producer, made an insider decision to raise its white milk price about 10 percent from Oct. 16 citing the rising cost of raw materials, but it officially called off the decision.

Sources suggested the Ministry for Food, Agriculture, Forestry and Fisheries pressed Seoul Milk to withdraw its decision because the hike in milk price would raise prices of other products that use milk, including ready-to-drink coffee, flavored milk, baked goods and baby formula.

Yesterday morning, industry sources were quoted as saying by Yonhap News Agency that Seoul Milk plans to raise their milk price by 10 percent from Oct. 16. At local discount stores, the price for a liter of milk is now 2,150 won ($1.83). If the price hike happens, milk will go up to about 2,370 won per liter.

But the dairy manufacturer made an official statement at 2 p.m. yesterday that the report was false and that it hasn’t even decided the timing or rate of the price hike.

While Seoul Milk officially claimed the Yonhap report was false, the story turned out to be true according to the JoongAng Ilbo.

Retail sources told the JoongAng Ilbo that they were verbally informed directly from the dairy manufacturer last week that it would raise its milk price around Oct. 16. They said Seoul Milk was scheduled to give them updates about the price hike yesterday.

A Seoul Milk official who asked not to be named confessed to the JoongAng Ilbo that the company originally made an insider decision to raise the milk price.

“Until this morning, we thought the factory price of milk will be raised from Oct. 16,” the official said. “But the situation suddenly changed this afternoon.”

The source said Seoul Milk retracted its decision after it received a phone call from a high-ranking agriculture ministry official who contacted the manufacturer after he saw the news report.

“As an agricultural cooperative that gets audited and inspection from Nonghyup (National Agricultural Cooperative Federation) we couldn’t ignore pressures from the Agricultural Ministry because Nonghyup is under control of the ministry,” the official said.

If the hike happens as stated by Yonhap News Agency, the move would come exactly two months after dairy farmers and milk producers reached an agreement on a 138-won hike in the price of raw milk on Aug. 16 from 704 won per liter to 842 won.

Three major dairy manufacturers including Seoul, Maeil and Namyang wanted to raise the milk price after the Aug.16 agreement but they couldn’t because the government asked the companies to refrain from raising the price until end of this year.

Choi Hyun-wook, a representative at Seoul Milk, told the Korea JoongAng Daily that although he can’t give an exact time of the price hike, the price needs to be adjusted to stop snowballing losses.

“We couldn’t raise the milk price after the Aug. 16 agreement and we’ve been losing 250 million won every day since then and that totals around 18 billion won,” Choi said. “The rate of hike will be within 10 percent.”

By Kim Mi-ju, Lim Mi-jin [mijukim@joongang.co.kr]

한글 관련 기사 [중앙일보]

서울우유, 값 올리려다 철회

오전 “10%” 오후엔 부인 … 업계 “농식품부 압력 있었다”

서울우유가 우유값을 10% 올리려다 철회했다. 이 과정에서 농림수산식품부의 개입이 있었다는 후문이다. 11일 오전 한 통신사는 “서울우유가 16일부터 우유값을 평균 10% 올리기로 했다”고 보도했다. 서울우유 측도 공식 부인하지 않았다. 하지만 이날 오후 2시 서울우유는 갑자기 공식 입장이라며 “우유값 인상 얘기는 사실과 다르다”고 밝혔다. “인상 시기와 폭이 전혀 결정되지 않았다”는 것이다.

　 익명을 요구한 서울우유 관계자는 “11일 오전까지만 해도 16일에 공장도가를 인상하는 걸로 알고 있었는데 갑자기 오후에 상황이 바뀌었다”고 말했다. 이 과정에 농식품부의 압력이 있었다는 게 업계의 관측이다. 업계 관계자는 “11일 오전 농식품부 국장급 인사가 서울우유 기획실 측에 전화를 한 것으로 안다”고 말했다. 서울우유 관계자는 “ 농협의 감사를 받는 우리 회사로선 농식품부의 의견을 무시하기 어렵다”고 에둘러 말했다. 이와 관련, 농식품부 측은 “우유업계가 원유 가격 인상을 빌미로 지나치게 우유값을 많이 올리려 해 협조를 요청했다”고 말했다.