Rising processed food costs to test shoppers’ budgets
Food companies are carefully raising the prices of their processed foods, placing another burden on the sagging shoulders of weary local shoppers.
The companies say they have been delaying the price hikes due to pressure from the government to help tame inflation, but that they can no longer ignore rising raw material prices and the recent spread of agflation worldwide.
Agflation refers to the phenomenon whereby high food prices exert upward pressure on inflation. The record heat wave that has hammered major crop harvests, coupled with some of the worst droughts in the United States in half a century, has pushed up food prices.
Now local companies are hitting consumers where it hurts by slowly inflating prices of processed foods that are staples in most people’s shopping trolleys, including canned tuna, ramen noodles, beer and processed rice.
Nongshim announced on Sunday that it would raise the price of three of its 20 snacks starting Monday, including its famous shrimp crackers, or saeukkang in Korean, which rose 11.1 percent from 900 won ($0.80) to 1,000 won. The snack generates about 65 billion won in annual average revenue for the company.
Other companies have already raised their prices. Late last month, Hite Jinro raised the factory price of its beer by 5.93 percent, promoting others to follow suit. Meanwhile, Dongwon F&B jacked up the price of a bundle of three 100-gram cans of tuna from 4,900 won to 5,380 won last week.
Samyang Food also raised the retail price of six food items by about 5 to 10 percent last week. Samyang Ramen went from 700 won to 760 won, while its instant cup ramen rose from 1,000 won to 1,050 won.
According to the local food industry, CJ Cheil Jedang, the country’s top food maker, raised the price of its instant rice by 9.4 percent from 1,280 won to 1,400 won on July 30, 10 years after the last price hike.
“This was unavoidable due to rising commodity prices like rice and wrapping paper,” said an employee at the company.
Beverage makers are also cautiously raising their prices.
Dr. Chung’s Food plans to make its white soybean milk 13 percent more expensive, and a string of processed food prices are projected to rise soon. Lotte Chilsung plans to raise the factory prices of 10 beverage items, including cola, cider, coffee and juice.
It is unclear whether Coca-Cola will jump on the bandwagon by ramping up the price of its signature soft drink, as it has already done so three times since December 2011. Soju and whiskey prices will remain unchanged but the price of bestselling OB beer is expected to go up soon, industry sources say.
The government said it is trying to mitigate the impact of the price hikes by staggering the timing and level of the increases with various companies, but that it can only do so much due to the sudden jump in international grain and fresh produce prices. “We’re looking into various measures, such as lowering tariffs to reduce the burden on processed food manufacturers,” said an official from the Ministry for Food, Agriculture, Forestry and Fisheries.
By Kim Jung-yoon [firstname.lastname@example.org]